Nikkei 225 Crashes as Japan Bond Yields Surge

The Nikkei 225 Index took a sharp hit on Wednesday, plummeting to its lowest level since August 10. The decline was triggered by surging Japanese government bond yields and growing expectations of a Bank of Japan rate hike.

Japan's 30-year government bond yield rose to 4.115%, while the five-year yield climbed to 2.15% after reaching an all-time high of 2.18%. The benchmark 10-year yield approached 3%, its highest level since 1996.

The trend is not unique to Japan, with long-term yields rising globally. In the US, the 20-year high was reached, while in Germany, the five-year yield jumped to 3.79% from below 1%. These increases are a result of growing concerns about economies worldwide.

Renewed tensions between the US and Iran have pushed crude oil prices up, with Brent hitting $91.8 and WTI moving to $85. Higher oil prices will lead to increased inflation in Japan and other countries, putting pressure on the BOJ to raise interest rates soon.