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Stress cracks in bonds are reshaping the AI and EM story

Rising long-term Treasury yields, not hype, pose the biggest risk to AI valuations, according to Gary Tan, portfolio manager at Allspring Global Investments, who spoke on The Business Times' Market Focus Weekly podcast. Tan said Washington's debt buybacks are a bandage, not a cure, for the fiscal deficit, and that capital is flooding into emerging markets as a diversification trade. He also noted the Bank of Japan is steering, not controlling, the pace of rate changes, with potential ripple effects on global liquidity.

read3 min views3 publishedAug 21, 2026
Stress cracks in bonds are reshaping the AI and EM story
Image: Businesstimes (auto-discovered)

Bond stress, oil spikes, and Japan's rate surge are rattling markets. Find out why AI valuations hinge on yields, and where smart money is heading next.

Markets are jittery for good reason. Asian shares are on track for weekly losses, US Treasury yields are climbing again despite a surprise buyback intervention, and oil prices just hit one-month highs amid Gulf tensions. On this week’s episode of Market Focus Weekly, correspondent Howie Lim sits down with Gary Tan, portfolio manager at Allspring Global Investments, to make sense of the chaos — and find the opportunities hiding inside it.

Why listen

A bandage, not a cure Tan doesn’t mince words about Washington’s debt buybacks: they’re a stabilisation tool, not a structural fix. He draws a sharp parallel to 2023 and the Global Financial Crisis to explain why liquidity engineering can only buy time, not solve America’s deepening fiscal deficit.

The real AI risk isn’t hype — it’s yields While tech investors fixate on Nvidia’s upcoming earnings, Tan argues the bigger story is unfolding in the bond market. Rising long-term yields are quietly compressing the present value of AI’s future profits, creating volatility that has little to do with the technology itself and everything to do with financial math.

Japan’s balancing act With Japanese interest rates at levels unseen in decades, Tan explains why the Bank of Japan is steering — not controlling — the pace of change, and why a shift in the yen carry trade could ripple through liquidity across global and emerging markets.

Why money is flooding into emerging markets (EM) Despite geopolitical noise, capital is pouring into developing economies at record levels. Tan calls it a diversification trade, not a decoupling — and lays out exactly where disciplined investors should be looking next.

From energy security to defense spending to AI’s true payback period, this episode delivers the clarity investors need right now. Sharp analysis, zero fluff — tune in before Nvidia’s earnings shake things up again. Listen now.

Discover more episodes at [bt.sg/podcasts](https://bt.sg/podcasts). Got feedback? Email us at [btpodcasts@sph.com.sg](mailto:btpodcasts@sph.com.sg).

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Written and hosted by: Howie Lim (howielim@sph.com.sg)

With Gary Tan, portfolio manager, Intrinsic Emerging Markets Equity team, Allspring Global Investments

Edited by: Howie Lim & Claressa Monteiro

Produced by: Howie Lim & Chai Pei Chieh

A podcast by BT Podcasts, The Business Times, SPH Media


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ABOUT THE PODCAST #

Market Focus Weekly distils the week’s key market moves and economic drivers across Singapore and the region. Hosted by Emily Liu, it delivers expert analysis and forward-looking insights every Friday. It is perfect for investors who want an audio briefing on the week’s investment landscape and what could move markets next.

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