JGB Yields Rise as Oil Prices Fuel Inflation Fears

Japanese government bond (JGB) yields rose on Monday as higher oil prices fueled inflation concerns, causing investors to weigh the likelihood of a Bank of Japan interest-rate hike in September.

The benchmark 10-year JGB yield increased by 1.5 basis points to 2.810 percent, while the two-year yield, most sensitive to BOJ's policy, rose to 1.615 percent, its highest level since May 1995.

Miki Den, senior Japan rate strategist at SMBC Nikko Securities, attributed the rise in inflation fears to oil prices increasing due to uncertainty over the Strait of Hormuz and the US must meet other conditions for a deal with Oman defining new shipping lanes.