Financial markets enter a dangerous new phase

world, financial markets look increasingly distressed. In Britain government-bond yields have surged (see chart) and , prompting the Treasury and Bank of England to issue statements attempting to soothe markets. In Japan the government in foreign-exchange markets to stem the fall in the yen for the first time since 1998. In China the central bank has for foreign-exchange trading, in a bid to restrain currency outflows. At the heart of the turmoil is the relentless rise of the American dollar and global interest rates. There is little relief on the horizon. Each market has its own idiosyncrasies. Britain’s new government plans the country’s . Japan is attempting to keep interest rates at rock-bottom levels, bucking the global trend. China’s government is struggling with the consequences of a “zero-covid” policy that has isolated it from the world.