Japanese Bond Yields Surge Amid Inflation Concerns

Japan's 10-year government bond yield has been rising, reaching around 2.94% on Monday and nearing its highest levels in over three decades. This surge is partly due to hawkish comments from Federal Reserve Chair Kevin Warsh, which strengthened bets for a US rate hike in September.

The jump in oil prices after the US military targeted Iranian rocket launchers preparing to deploy mines into the Strait of Hormuz has also contributed to inflation concerns, putting upward pressure on global bond yields.

Domestically, traders are anticipating a Bank of Japan rate increase in September amid concerns over yen weakness and import-driven inflation. BOJ Deputy Governor Ryozo Himino emphasized that the central bank remains vigilant to inflation risks and will discuss further policy tightening.