Bond Market Turmoil: Global Yields Surge Amid Inflation Fears

Global bond markets from Tokyo to New York faced extended losses on Monday as rising energy prices due to the Middle East conflict heightened inflation fears. This spurred investor bets on interest rate hikes by central banks worldwide, especially with U.S. Treasury yields reaching new highs.

Bonds across global markets, from Tokyo to New York, faced continued losses on Monday as the relentless rise in energy prices from the Middle East conflict fueled inflation worries and pushed investors to anticipate rate hikes from central banks worldwide.

The benchmark 10-year U.S. Treasury yields climbed to unprecedented levels since February 2025, reaching 4.6310% during early Asia trading. The 30-year U.S. Treasury yield also soared, driven by rising energy costs and geopolitical tensions.

The market turbulence was compounded by news of Japan's potential issuance of additional debt to fund extra budgetary needs caused by the war. This move, along with stalled peace efforts in Iran, aggravates bond market anxieties on the backdrop of rising global inflation pressures.