Global bond yields soar to multi-decade highs as Middle East turmoil reignites inflation fears
Oil prices above $90 a barrel revived inflation worries as investors priced in more rate hikes and pushed Japanese 10-year yields to 3% for the first time since 1996.
- 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.
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U.S. Treasury yields rose across the board as international oil prices surged due to political instability in the Middle East. According to CNBC on the 1st (local time), the yield on the 10-year U.S. Treasury bond, which serves as the benchmark for global market rates, recorded 4.788% this morning, up 3 basis points (1 bp = 0.01 percentage point) from the previous day. This is the highest level since January 14 of last year. The yield on the 2-y…
The interest on the ten-year bond in the US rises to 4,788%, its peak since January 2025, driven by tension in the Middle East and the rise in crude oil.The military actions in Iran and the increase in oil to more than 88 dollars raise inflation and pressure the debt, analysts say.
(New York = Yonhap News) Correspondent Kim Yeon-sook = U.S. Treasury yields rose across the board as international oil prices surged due to the recent escalation of tensions in the Middle East.
Global bonds sell off as Middle East conflict escalates, further stoking inflation fears
Global bond yields rose Tuesday to their highest levels in decades as an escalation in the Middle East conflict pushed up oil prices and increased concerns that the Federal Reserve and other central banks could raise interest rates this month.
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