AI tech panic intensifies bond selloff, global credit spreads rise to 17-month high.

Global bond market indicators are flashing the strongest risk-off signal in more than a yearthe AI stock selloff and heightened geopolitical tensions are driving investors toward safe-haven assets. On Friday, the spread on higher-rated Asian corporate dollar bonds widened to its highest level since July last year, in sync with the broader credit market. The move aligns with a jump in the global corporate bond yield premium: indices show the premium widened to its broadest since May 2025, reaching as much as 129 basis points. Concerns are mounting over the pace of debt-fueled AI spending, with the market worried the technology cannot generate profits fast enough, triggering the turmoil. The sharp unwinding of AI bets has divided prominent investors: Citadel's Ken Griffin warned of a bubble, while Blackstone President Jon Gray said there is no need for concern because demand is "almost parabolic." Asian credit markets opened weak on Friday. Traders said regional credit default swap spreads widened by about 1.5 basis points to 78, China's tech sector spreads widened by 3 to 5 basis points, and India investment-grade and South Korean credit spreads widened by as much as 3 basis points. Meanwhile, U.S. Treasuries, viewed as safer assets, posted their best single-day performance in more than two years, rising across all maturities. A wave of buying also hit U.S. Treasury futures as traders rushed to close out bearish bets and cover shorts. In addition, the tech stock selloff deepened, with investors flocking to traditional safe-haven assets including the yen and Japanese government bonds. The yen extended its rally to its strongest level in more than a month, while JGB yields fell across the curve.