Global bond selloff intensifies after fresh US strikes on Iran
Fresh US attacks on Iranian targets pushed oil prices higher, sent stocks lower and triggered a sharp rise in bond yields worldwide, with Japan's 10-year yield hitting its highest level since 1996. The turmoil compounds existing worries over inflation and rising government debt.
Global financial markets showed heightened volatility after the United States carried out new attacks on Iranian targets. The strikes pushed oil prices upward while equity markets declined.
At the same time, government bond yields climbed sharply across several major economies, signalling increased investor caution. The move was particularly pronounced in Japan, where the 10-year government bond yield reached 3% for the first time since 1996.
Inflation and debt concerns
Two underlying factors are amplifying market unease: growing fears of accelerating inflation and concern over the scale of government debt. US government debt has now risen above 40 trillion dollars, adding further pressure on bond markets.
In the eurozone, inflation climbed in August to its highest level in three years, driven largely by higher energy prices.
Taken together, the developments point to mounting nervousness in global financial markets, where geopolitical tension in the Middle East is compounding existing economic worries about inflation and fiscal sustainability.
