Bond Yields Soar as Oil Eases From Recent Highs

The bond market is on edge as Japanese government bond yields reached their highest level in over 30 years, following a steep sell-off in US Treasuries. The 10-year yield jumped to 3.06%, a level not seen since August 1996. Oil prices have eased from recent highs, and the greenback has held gains after Iran's leader vowed to never surrender.

Market participants are looking ahead to central bank speeches and economic releases for signals on future interest rate hikes. The summit between US President Donald Trump and Chinese President Xi Jinping is also in focus, with hopes for progress on trade relations.

Ray Attrill, head of FX strategy at the National Australia Bank, noted that equities are showing signs of creaking under the weight of ever-rising bond yields. In a risk-off environment, the US dollar tends to find safe-haven support, he said.