Bond Yields Soar as Energy Prices and Inflation Expectations Rise

Global bond yields have surged across regions and maturities, pushing borrowing costs to their highest in years. The war in the Middle East has sent energy prices higher, lifted inflation expectations, and prompted traders to expect more rate hikes.

The U.S. Treasury is set to at least double the size of its buyback operations for longer-dated debt, starting with a $2 trillion pension fund operation on Wednesday.

In Japan, the yield on 10-year notes has risen above 3% for the first time in three decades, sparking concerns about the potential impact of a mass repatriation of Japanese capital from U.S. and European debt markets.