Japan's 40-Year Bond Yield Hits 4% for First Time | The Asia Trade 1/20/2026

Watch on YouTube ↗ | January 20, 2026 at 03:25 | 1:34:16 | Bloomberg Markets

Speakers

Avril Hong — Reporter, Bloomberg Markets

Ruth Carson — Correspondent, Singapore

Annabel Droulers — Anchor, Bloomberg TV

Vasu Menon — Managing Director of Investment Strategy, OCBC

Charlotte Yang — Asia Equities Reporter, Bloomberg

Kristalina Georgieva — Managing Director, International Monetary Fund

Arthur Sinodinos — Former Australian Ambassador to the U.S.

Paul Dobson — Executive Editor, Bloomberg

Jenny Johnson — President and CEO of Franklin Templeton

Shery Ahn — Anchor, Bloomberg Television

Gearoid Reidy — Bloomberg Opinion Columnist

Summary

Bloomberg's The Asia Trade covers a global risk-off session driven by U.S.-Europe tensions over Greenland and tariff threats, with gold at a record high and the dollar under pressure. Japan confirmed a February 8 snap election, pushing long-dated JGB yields to multi-decade highs and putting the yen and BOJ policy in focus. Guests discuss Asia ex-Japan equity allocation, China policy, Korean markets and Hyundai's robotics-driven rally, while IMF and Franklin Templeton leaders flag AI investment and productivity risks.

U.S.-Europe tensions over Greenland and new tariff threats drove risk-off sentiment, a weaker dollar and record gold prices.
Japan's Prime Minister called a February 8 snap election, lifting JGB yields and raising expectations of fiscal spending and BOJ caution.
OCBC's Vasu Menon favors Asia ex-Japan equities, likes China, Hong Kong, Singapore and Malaysia, and expects Asian currencies to strengthen as the dollar weakens.
Korean markets remained a focus, with Hyundai Motor rallying on robotics and AI optimism and the Korea Exchange CEO forecasting further KOSPI gains.
Chinese small caps face pullback risks after a strong run, according to Bloomberg's Charlotte Yang.
IMF's Georgieva cautioned that AI investment must be justified by sustained productivity gains, while Franklin Templeton's Jenny Johnson said AI will create clear winners and losers.
Australian critical minerals and U.S.-Australia cooperation were discussed as strategic opportunities.

Ideas

Avril Hong Reporter, Bloomberg Markets 3:03

Gold supported by geopolitical risk.

Gold is at record highs and is unlikely to retreat given the geopolitical backdrop, including Trump's Greenland-related tariff threats and a global risk-off session.

Avril Hong Reporter, Bloomberg Markets 21:41

Swiss franc is standout haven.

The Swiss franc stands out among traditional safe havens because the yen and dollar have their own troubles; further safe-haven moves into the franc are worth watching amid U.S.-Europe tensions.

Ruth Carson Correspondent, Singapore 27:17

Yen weakness likely; options price 165.

Although the yen is considered cheap at 158 per dollar, options positioning implies about a 40% chance that USD/JPY reaches 165 before June, making an aggressive yen long risky and suggesting further yen weakness.

Kristalina Georgieva Managing Director, International Monetary Fund 32:28

AI investment reward depends on productivity.

AI investment is being rewarded by profitability so far, and funding flows are expected to continue at the expense of other areas, but she cautions that the productivity impact is uncertain—growth impact estimates range from 0.1% to 0.8%—so investors should monitor whether the reward justifies the massive investment scale and speed, with dot-com-bubble parallels possible.

Annabel Droulers Anchor, Bloomberg TV 41:29

Hyundai gains on robotics, AI optimism.

Hyundai Motor is drawing analyst target upgrades on improved fundamentals and optimism around the robotics/embodied AI value chain; Boston Dynamics' CES humanoid and Nvidia partnership are easing fears that Hyundai is falling behind in cutting-edge tech, supporting positive earnings expectations.

Vasu Menon Managing Director of Investment Strategy, OCBC 51:04

Overweight Asia ex-Japan on dollar weakness.

He is overweight Asia ex-Japan over a 12-18 month horizon, citing more attractive valuations and greater opportunities as the U.S. dollar weakens and concerns about America grow; he remains neutral on the U.S. because it is still a key global growth engine, and neutral on Japan due political uncertainty, BOJ policy uncertainty and a weak yen. He specifically likes Hong Kong, Singapore and Malaysia within the region.

Vasu Menon Managing Director of Investment Strategy, OCBC 51:04

Overweight Asia ex-Japan on dollar weakness.

He is overweight Asia ex-Japan over a 12-18 month horizon, citing more attractive valuations and greater opportunities as the U.S. dollar weakens and concerns about America grow; he remains neutral on the U.S. because it is still a key global growth engine, and neutral on Japan due political uncertainty, BOJ policy uncertainty and a weak yen. He specifically likes Hong Kong, Singapore and Malaysia within the region.

Vasu Menon Managing Director of Investment Strategy, OCBC 51:27

Likes China on measured PBOC policy.

He likes China and expects only measured, gradual PBOC easing rather than a big-bang stimulus; the government appears comfortable with 4.5%-5% growth, wants to stabilize the property market and pursue quality growth, and is keeping dry powder while monitoring Trump/US policy headwinds.

Vasu Menon Managing Director of Investment Strategy, OCBC 54:40

Asian currencies strengthen as dollar weakens.

Asian currencies should strengthen as the U.S. dollar weakens on expected Fed rate cuts and U.S. geopolitical concerns; the Chinese yuan could hold firm, and regional currency strength is another reason to be positive on Asia ex-Japan.

Vasu Menon Managing Director of Investment Strategy, OCBC 54:40

Asian currencies strengthen as dollar weakens.

Asian currencies should strengthen as the U.S. dollar weakens on expected Fed rate cuts and U.S. geopolitical concerns; the Chinese yuan could hold firm, and regional currency strength is another reason to be positive on Asia ex-Japan.

Charlotte Yang Asia Equities Reporter, Bloomberg 79:48

Avoid China small caps on pullback risks.

Chinese small caps, represented by the CSI 2000, are at risk of a pullback after a strong run: authorities have signaled unease over the rally and raised margin financing ratios, technicals are overbought, many small caps have weak fundamentals/profits, earnings season may bring caution, and historical seasonal patterns are unfavorable.

Arthur Sinodinos Former Australian Ambassador to the U.S. 89:07

Australian critical minerals opportunity with U.S.

Australia has an actual stockpile of critical minerals that is important to the U.S. on security grounds; many countries are seeking deals with Washington, the U.S. has provided a framework, and it is up to Australian companies to take advantage of the opportunity.

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This Bloomberg Markets video, published January 20, 2026, features Avril Hong, Ruth Carson, Kristalina Georgieva, Annabel Droulers, Vasu Menon, Charlotte Yang, Arthur Sinodinos discussing GLD, CHF, USD/JPY, AI equities, 005380.KS, AAXJ, Hong Kong equities, Singapore equities, EWM, SPY, EWJ, FXI, Asian currencies, CNY, UUP, CSI 2000, Australian critical minerals. 12 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Avril Hong, Ruth Carson, Kristalina Georgieva, Annabel Droulers, Vasu Menon, Charlotte Yang, Arthur Sinodinos · Tickers: GLD, CHF, USD/JPY, AI equities, 005380.KS, AAXJ, Hong Kong equities, Singapore equities, EWM, SPY, EWJ, FXI, Asian currencies, CNY, UUP, CSI 2000, Australian critical minerals