Japan Government Bonds Slide Amid Inflation Fears and BOJ Rate-Hike Bets

Japanese government bonds slid on Monday, pushing yields back towards multi-decade highs due to inflation concerns and expectations for further central bank tightening.

The benchmark 10-year JGB yield climbed 2 basis points (bps) to 3.095%, its highest close since August 1996, as yields move inversely to bond prices.

The 2-year yield, sensitive to Bank of Japan policy rates, advanced 1.5 bps to 1.950%, matching a 31-year peak seen last week.

A key gauge of Japan's service-sector inflation rose in August at the fastest annual pace in over two years, highlighting price pressures that may justify more interest rate increases.