The pound plumbed new depths against the dollar and investors rushed for the perceived havens of gold and government bonds as financial turmoil intensified in the wake of the UK’s Brexit vote, with sterling hitting $1.2798 in early Asian trading on Wednesday — its lowest in more than 31 years.
Investors, spooked by a number of UK property funds halting redemptions, switched to risk-off mode and sent yields on government bonds tumbling to new lows. Jitters reverberated around the globe: the 10-year Treasury yield fell into uncharted territory below 1.36 per cent on Tuesday while yields on the entire suite of Swiss government bonds out to 50 years are now in negative territory.
As Asia picked up the baton on Wednesday, yields on the government bonds of both Australia and Japan hit record lows, with the 10-year Japanese benchmark touching minus 0.27 per cent while its Australian counterpart fell to 1.84 per cent.