Global Bond Rout Deepens as Japan Yields Hit 30-Year High

A global bond rout deepened on Tuesday as Japan's 10-year yield hit 3% for the first time since 1996, a milestone driven by trader angst over energy-driven inflation, monetary tightening, and worsening fiscal conditions.

The sell-off affected major economies from the US to Germany and Britain, with their 10-year bond yields surging. The euro zone saw its yields hit fresh over-10-year highs as the Middle East crisis fueled global price pressures, prompting market bets that central banks will raise interest rates soon.

J.P. Morgan Asset Management's Tai Hui attributed the rise in US and Japanese yields to inflation and fiscal worries, citing 'the stalemate in the Middle East risks pushing energy prices higher... meanwhile, few actions have been taken to consolidate fiscal deficits in both economies.'