Nikkei 225 Plunges as Japan Bond Yields Soar Amid Inflation Fears

The Nikkei 225 Index has slumped sharply in recent days due to rising Japan bond yields, which have soared to their highest level since May 20th. The 30-year government bond yield jumped to 4.11%, while the five-year yield rose to 2.13%. These increases are part of a global trend, with long-term yields experiencing a strong uptrend in various countries.

The rising odds of US-Iran kinetic action and the resulting higher crude oil prices have contributed to the pressure on Japan's economy. As analysts at Mizuho predicted, the Bank of Japan (BoJ) may hike interest rates soon to bridge the gap with the US. The yen's underperformance, with the USD/JPY pair trading at 159.36, further supports this expectation.

The Nikkei 225 Index companies have also been affected by the rising bond yields and inflation concerns. Technology names like Softbank, Kioxia, and Tokyo Electron dropped significantly, while other top names such as Mitsubishi UFJ, Toyota, and Hitachi were down by over 4%.