Japan Yields Soar to 30-Year High Amid Inflation Fears and Middle East Tensions

Japan's 10-year government bond yield has reached its highest level since 1996, climbing towards 3.1% on Monday. This rise in yields is attributed to persistent concerns over energy-driven inflation, which have increased expectations that the Bank of Japan (BOJ) will accelerate its rate-hiking cycle.

The BOJ's benchmark rate has been below the neutral range, and policymakers are emphasizing the need for preemptive action against upside risks. This could lead to a second consecutive rate hike in October, according to a former BOJ official.

The recent rejection by US President Donald Trump of Iran's proposal to reopen the Strait of Hormuz has contributed to rising oil prices. The Strait is critical for global energy supply, and its closure or restriction would have significant implications for the global economy.