The Japan Times - Bitcoin jumps, stocks bounce as traders weigh US Treasury action

Oil prices held on to the week's gains as the United States and Iran remained deadlocked over a deal to reopen the Strait of Hormuz.

Bitcoin climbed almost six percent to over $77,000 and is up more than 20 percent this week -- to its highest levels since May -- as the US Treasury's surprise move to buy back more of its own bonds increased liquidity and added to investor's risk appetite. Gold also rose.

The rally in the world's biggest cryptocurrency by market value was also spurred by US President Donald Trump urging lawmakers to pass crypto legislation aimed at spurring its use, which has stalled in the Senate.

"The turmoil in the debt markets continues despite efforts to calm feverish borrowing costs," said Susannah Streeter, chief investment strategist at Wealth Club.

"Investors remain concerned about inflationary risks and the growing mountain of government borrowing, while at the same time, debt being issued by tech giants building out the AI revolution is offering stiff competition," she added.

The three main US stocks indexes were all higher in early trading after having mostly fallen this week.

In Europe, London, Paris and Frankfurt were all also higher.

Still, even with Friday's bounce, European stock indices "look set to post their worst weekly performance in nearly two months", said David Morrison, an analyst at Trade Nation.

"The escalation in the US-Iran war, higher oil prices and inflation concerns are all factors weighing on equities. This week's selloff marks a stark reversal for markets that had entered August riding a stellar second-quarter reporting season," he said.

The US Treasury bought its own bonds this week in an effort to push down borrowing costs after the 30-year yield surged to levels last seen in 2007, just before the global financial crisis.

European government bond yields are also at their highest levels in more than a decade.

Yields have risen on fears of inflation and as the United States reported this week that its federal debt stockpile had climbed to over $40 trillion.

The Treasury's buy-back briefly brought some relief from higher yields, but they soon resumed rising.

"For now, investors are viewing the Treasury's steps more as a band-aid than a structural solution to rising yields," said Deutsche Bank's Jim Reid.

Earlier in Asia, stocks rose with tech-rich Seoul helped higher by a rally in chipmakers.

Samsung jumped 3.9 percent after saying it spend a massive $80 billion to buy back its own shares, following weeks of turbulent trading.

Hong Kong also rose, while Tokyo fell and Shanghai was flat.

On currency markets, the yen rose against the dollar after Japanese inflation picked up last month on higher oil prices, giving the country's central bank room to raise interest rates next month.

Traders will be closely watching next week's annual meeting of central bankers, economists and finance chiefs in Jackson Hole, hoping for some clarification on monetary policy after a joint US-Japan intervention to stem the yen's weakness.

- Key figures at around 1340 GMT -

New York - DOW: UP 0.6 percent at 53,066.90 points

New York - S&P 500: UP 0.4 percent at 7,668.53

New York - Nasdaq Composite: up 0.2 percent at 26,123.96

London - FTSE 100: UP 0.6 percent at 10,816.20

Paris - CAC 40: UP 0.3 percent at 8,479.06

Frankfurt - DAX: UP 0.5 percent at 26,122.08

Tokyo - Nikkei 225: DOWN 0.3 percent at 66,016.36 (close)

Hong Kong - Hang Seng Index: UP 1.2 percent at 26,009.46 (close)

Shanghai - Composite: FLAT at 3,905.20 (close)

Dollar/yen: DOWN at 158.87 yen from 159.11 yen on Thursday

Euro/dollar: UP at $1.1690 from $1.1680

Pound/dollar: UP at $1.3636 from $1.3630

Euro/pound: DOWN at 85.66 pence from 85.68 pence

West Texas Intermediate: UP 0.2 percent at $87.01 per barrel

Brent North Sea Crude: UP 0.5 percent at $94.27 per barrel

Y.Ishikawa--JT