Markets live: ASX surges, but key Japanese benchmark hits level not seen since global financial crisis

It’s worth keeping an eye on the global bond market.

In particular, the Japanese bond market is worth examining.

Today the Japanese 10-Year government bond yield is up 3 basis point (0.03%) to 1.79% at 2:20pm AEDT.

Earlier today Japan’s 10-year government bond yield climbed above 1.8% — its highest level since 2008.

Investors are anticipating an announcement from newly minted Prime Minister, Sanae TakaichI, about her multi-trillion-yen fiscal stimulus package.

The bigger it is, the more Japanese government bonds will need to be sold to finance it.

Hundreds of billions of dollars have left Japan in recent years and made its way into the US government bond market and US equities (shares).

The carry trade has seen investors borrow money from Japan at a low cost and invest that money in the US.

Analysts say there will come a point when Japanese interest rates make this trading strategy unfeasible.

When this happens there may be a capital flight out of the US and Europe and back to Japan.

Where that yield (rate) is, to encourage this trade, is the $1 trillion question.

“We are waiting with bated breath to see when capital will be repatriated from offshore into Japan,” Jamieson Coote Bonds’ Charlie Jamieson told ABC News.

I’m thrilled you finance whizzes are sharing thoughts on the ABC biz blog.

You rock.

The National Australia Bank (NAB) is pumping out the research today.

It’s released its new ‘Consumer Spend Trend’ (October 2025) report.

Here’s an excerpt:

Over the past year:

• Total consumer spending rose 7.1%, marking a slowdown from the 8.0% growth rate recorded in September.
• Spending on utilities & telecoms led the growth in the year to October after the end of energy bill rebates. 
• Spending also increased significantly in discretionary categories, including personal goods and hospitality.

Well put, Matthew.

The Reserve Bank desperately wants to know how to measure the economy’s capacity or, more specifically, it’s amount of spare capacity.

This can inform the central bank on whether aggregate demand in the economy equals aggregate supply.

This in turn tells the RBA if, for example, demand is greater than supply, that price increases are likely to grow in magnitude.

In addition, the Reserve Bank lacks insight into business’ willingness to pass on higher costs to customers.

This would also inform the bank’s perspective on the present inflation threat.

Earlier today, RBA chief economist, Sarah Hunter, spoke about this.

Here’s an excerpt of her remarks:

A particular focus of our work on inflation dynamics is to understand whether businesses have changed the way they set prices since the pandemic. Do firms now look to pass costs through more quickly, if they can, given the recent experience of high inflation? How do firms’ profit margins vary as economic conditions change?

To get a handle on these questions, we are making use of microdata sets from the Australian Bureau of Statistics (ABS) that allow us to look at anonymised individual firms’ pricing decisions. We’re hopeful that this research will tell us more about how businesses respond as their costs and conditions change, which will ultimately add to our understanding of inflation.

A second topic we’re currently focused on is the economy’s supply capacity. As my colleague Deputy Governor Hauser recently discussed, the Monetary Policy Board is focused on setting monetary policy to keep demand in the economy in line with potential supply. If we can sustain this over time and expectations remain anchored, inflation will be within our 2–3 per cent target band and the labour market will be sitting at full employment.

Here’s a note from CreditorWatch on the road transport sector:

• Operators are being squeezed by higher fuel and finance costs, low profit margins, driver shortages, regulatory complexity and intense price competition – much of it from low-cost or foreign-backed entrants.
• Business closure rates in the road transport sector are now approaching those of the notoriously volatile hospitality sector, posing mounting risks for any business reliant on road freight transport.
• Key warning signs include a sustained increase in invoice payment defaults (up 99.1% year-on-year) and a surge in companies carrying large ATO tax debts.
• The ACT saw the highest closure rate in the sector (14.52%) over the past 12 months with Western Australia faring best at 5.71%.

The National Australia Bank specialises in business banking.

As such, its business surveys are well regarded and studied by the Reserve Bank.

It’s November “Forward View — Australia” is featured below.

In really simply terms, the NAB is saying the Australian economy is, despite only producing below-trend growth, bursting at the seams.

The capacity of the economy to grow, needs to improve, or stronger demand will produce further inflation.

In other words, Australia’s productivity needs to lift, urgently.

Overall, we continue to see a relatively soft landing for the economy, with only small tweaks to our 2026 growth forecast (slightly softer) and unemployment rate (slightly higher) forecast over the past month. Q3 inflation data was stronger than the RBA’s expectations and confirmed a material and broad-based acceleration from its H1 2025 pace. We expect underlying inflation above 3% for the next couple of quarters, before easing back into the target band and moderating a little further to 2.5% over 2027.

With economic growth expected to sustain near trend, the unemployment rate to remain low, but a less benign inflation back drop, we see the RBA on hold at 3.6% for the foreseeable future. Abstracting from a negative global shock, the key risk for the RBA and the interest rate outlook is clearly that capacity constraints broaden or intensify.

Indeed, the latest NAB Business Survey for October show that business conditions increased further in the month, and that capacity utilisation remains well above its long-run average. Encouragingly, input cost growth, as well final product price inflation, are tracking around their long-run averages. Early evidence of margin expansion may pose some threat to this benign outcome.

Data over the next couple of months will be crucial in assessing how underlying trends in the economy are progressing on the demand side following the volatility in key data points over recent months.

Though dated, the Q3 national accounts (where we expect overall growth of 0.5% qoq) will provide an updated and complete picture of household sector dynamics including income growth, as well a broader perspective on growth– including dwelling and business investment. Fresh reads for the labour force survey and household spending will provide greater clarity around the ongoing (or otherwise) resilience and capacity of the labour market as the impact of private sector activity flows through, and the durability of the consumer recovery. The first full monthly CPI is released next week and will provide a more granular picture of recent inflation trends amid the spike in Q3.

Stan,

I wouldn’t dream of calling your bluff.

Thanks for the comment.

DT

An oversight, Brian.

Our apologies.

DT

Local analysts have had some time to digest the avalanche of numbers from AI chipmaking giant, Nvidia.

This note is from the desk of VanEck’s Anna Wu:

Nvidia’s strong results today, beating both headline and revenue expectations, have given the US tech market the boost it has been waiting for over the past week. The stock was up as much as 5% in after-hours trading. “Picks and shovels” names such as CoreWeave and Micron also rallied.

From a guidance perspective, Nvidia showed confidence by projecting US$66.3 billion in revenue for the next quarter, compared with some bullish street estimates going as high as US$75 billion. This forecast reflects robust demand even without assuming any contribution from China, suggesting that any upside surprise from that market could be an additional tailwind.

While the results do not fully resolve the AI capex and monetisation dilemma faced by other hyperscalers, they underscore the surging demand for high-end AI chips. Nvidia is increasingly cementing its dominance across the end-to-end AI infrastructure, an ecosystem that is inseparable from the training and inference of large language models. In this space, scale matters, and that continues to underpin its outlook and valuation.

New ABS data shows domestic energy use fell by 0.7% to 5,691 petajoules (PJ) in the 2023-24 financial year.

“Household use of energy fell by 3.4% to 980 PJ in the 2023-24 financial year, driven by a 15.1% fall in natural gas usage,” the ABS head of environment statistics Luisa Ryan said.

“Electricity usage remained flat, with most other energy products recording small decreases.

Energy net use by industry fell by 0.1% to 4,711 PJ.

This reflected lower energy use in the manufacturing industry, which fell 6.1%.

This fall was offset by rises in the transport industry (up 10.6%) and the commercial and services sector (up 3.2%).

“Renewable energy production in Australia continued to grow in the 2023-24 financial year, with solar energy production rising by 15.9% and now accounting for 51% of renewable energy,’ Ms Ryan said.

The Australian Council of Trade Unions (ACTU) is reporting 1 in 5 Australian workers sustained a mental health injury in the last year.

“Australian workers experienced unacceptably high levels of burn-out, stress and over-work,” according to the union’s Work Shouldn’t Hurt Survey.

“The report highlights widespread work-related psycho-social injury rates, including those caused by a spike in violence and aggression in the workplace and discrimination.”

The reports states that “Only around 1 in 10 workers who sustained a mental health injury filed a claim for workers compensation, compared to a claim rate three times higher by workers who experienced physical injuries.”

“These statistics,” the ACTU says, “again highlight how workers compensation schemes around the country are failing workers.”

Stan, stan, stan.

Good question! lol

DT

G’day Sam,

The Nikkei 225 has a heavy concentration of tech stocks, including: Electron, Advantest, SoftBank Group, Sony, and Nintendo.

The tech sector has been particularly volatile of late due to bubble fears.

Hope that helps.

DT

The ABS has released some, frankly, disturbing fraud data.

Its report notes an estimated 1.1 million Australians with disability experienced fraud in a 12-month period.

“The new Disability and Crime report provides valuable insights into the lived experiences of people with disability and the types of crime they are affected by.”

“Today’s report shows that 18 per cent of people with disability experienced fraud in a 12-month period, compared with 13 per cent of people without disability,” head of crime statistics, William Milne said.

Analysis by the ABC’s national political lead David Speers takes a look at the CSIRO, and which jobs the government protects in its national interest. Take a look below:

I just spotted this note from MooMoo’s dealing manager Paco Chow.

“For the US session, the broader technology sector helped lift the market, with Alphabet up 3%, Broadcom up 4% and Oracle rising 2.3%.”

“The bounce came after a few days where doubts over AI stocks dominated.

“Investors also remain cautious over uncertainty around US interest rates, with Federal Reserve meeting minutes showing a split over the timing of future cuts, and a delay in the monthly jobs report further muddying the picture.”

With so much focus on Nvidia, it’s also worth looking at the outlook for US interests rates.

It’s another big market driver.

Take a look at this report by my colleague Rhiana Whitson:

Hi folks,

I’m on the blog this afternoon.

Always appreciate your comments and questions.

Let’s go.

DT