Bond Rout Accelerates as Investors Bet on Higher Interest Rates

The global bond market continues to decline, with Japanese yields reaching levels not seen in over 30 years. Investors are betting that policymakers will raise interest rates to combat sticky inflation and lax fiscal policy.

Japanese bonds, or JGBs, saw their yields reach new highs across the curve on Tuesday. The 10-year UK gilt yield also rose to its highest since 2008, while the 30-year yield reached a record high since 1998.

The US Federal Reserve is expected to raise interest rates at its upcoming meeting in September. Fed Governor Michael Barr stated that the Fed will have to act 'decisively' if inflation doesn't moderate, indicating a potential rate hike.