Global bond yields soar to multi-decade highs as Middle East turmoil reignites inflation fears
The move raises borrowing costs for Japan’s huge debt load and could reduce demand for overseas bonds, traders said.
- On Tuesday, Japan's benchmark 10-year bond yield struck the key 3% barrier for the first time since 1996, while the two-year yield notched a 31-year peak at 1.795%.
- Deepening global debt selloffs driven by oil-fueled inflation and monetary tightening have pushed yields higher from Tokyo and Sydney to New York and London as investors anticipate central bank rate hikes.
- "Investors are increasingly demanding greater compensation to own duration," said Masahiko Loo, senior fixed income strategist at State Street Investment Management in Tokyo, as sovereign issuance and corporate funding compete for capital.
- Traders expect the Bank to raise rates this month, while Treasury Secretary Scott Bessent has urged the central bank to tighten policy as Japan's ministries prepare record budget requests.
- Prime Minister Sanae Takaichi faces rising costs to service the nation's massive debt pile, while analysts warn higher yields could make carry trades less attractive and drive re-allocation into Japanese assets.
12 Articles
12 Articles
Global bond yields soar to multi-decade highs as Middle East turmoil reignites inflation fears
Bond yields surged across major markets Tuesday as U.S.-Iran hostilities revived energy and inflation risks, with Japan and U.K. yields at multi-decade highs.
World in Brief: Global bond sell-off continues; America’s army chief resigns
The global bond sell-off gathered pace. Japan’s ten-year government bond yields rose to 3%, their highest since 1996. Several other countries, including America, saw their borrowing costs grow, too. The lift came after America and Iran began fighting again on Sunday, raising energy prices and thus fears that central banks will increase interest rates in order to combat inflation.
Global Bond Selloff Sends Yields to the Highest Level Since 2008
Global bond yields climbed back to the highest level in almost two decades as rising oil prices fueled inflation concerns and investors ramped up expectations for interest-rate hikes.
Global bond rout deepens as Japan yield hits key threshold
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