BOJ Rate Hike Bets Send Japanese Bond Yields Soaring

Japan's benchmark 10-year government bond yield rose to its highest level in nearly three decades on Tuesday, pressured by rising global bond yields and growing expectations that the Bank of Japan could raise interest rates as early as September.

The 10-year Japanese government bond yield increased by 2.5 basis points to 2.945% in early trading, its highest level since September 1996, according to Reuters. Bond yields move inversely to prices, meaning the rise in yields reflected renewed selling pressure in the government bond market.

The global inflation concerns are driving up bond yields higher as investors reassess the inflation outlook. Higher oil prices and a lack of progress in Middle East peace talks have heightened concerns over renewed inflationary pressures.