(Bloomberg) — Treasury 30-year yields fell below 2% for the first time since February and those on 10-year securities slid under 1.40% as a selloff in equities fueled demand for haven assets.

Thirty-year yields declined as much as nine basis points to 1.93%, and 10-year yields dropped the same amount to a four-month low of 1.35%. Stocks dropped across Asia with Japan’s Nikkei 225 Stock Average sliding 4%, while the yen strengthened against all its major counterparts.

“It is primarily the Asian equity selloff, which is also weighing on U.S. equity futures, that is weighing on the 10-year yield,” said Alvin T. Tan, head of Asia currency strategy at Royal Bank of Canada in Hong Kong. “It’s more a classic risk-off move as we’re seeing that too in yen strength this morning.”

Traders have adjusted positions as traders unwound reflation trades in the wake of the Federal Reserve’s hawkish pivot last week, sending the spread between five- and 30-year Treasuries to the narrowest this year. The flattening move was aided by a scramble to unwind curve steepeners, with the likes of Morgan Stanley and TD Securities stopped out of recommended trades, while Goldman Sachs analysts unwound outright 30-year short positions.

Positioning in the bond futures market collapsed for a second session on Friday, consistent with large unwinds of trades. Across major bond futures, open interest — a measure of outstanding positions — dropped by the equivalent of around $12.5 billion of 10-year cash bonds.

The shift has triggered a flattening in the yield curve elsewhere as investors speculate that other central banks can afford to turn more hawkish without fueling excessive gains in their currencies. Australia’s three- and 10-year spread is at the tightest since February, and a similar trend was observed in New Zealand.

The Fed’s rate outlook has pushed short-end rates higher while longer-end ones fall as traders calculate there’s now little risk that U.S. inflation will remain above target for long. St. Louis Fed President James Bullard added fuel to the debate on Friday, saying inflation risks may necessitate a rate hike next year.

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