Japan Bond Yields Soar Amid Inflation Pressures and Tightening Bets

Japanese government bond yields rose sharply on Monday, nearing multi-decade highs as inflation pressures and expectations of further monetary policy tightening weighed on debt prices.

The benchmark 10-year yield climbed 2 basis points to 3.095%, putting it on course for its highest closing level since August 1996.

Data released on Monday showed that a key measure of inflation in Japan's services sector accelerated in August at its fastest annual pace in more than two years, highlighting continued price pressures and adding to expectations that the BOJ could face further pressure to raise interest rates.

The BOJ raised its key interest rate to 1.25% this month, taking it to a 31-year high, according to minutes from the central bank's July policy meeting.