At a Glance
- US 30-year Treasury yields hit highest since 2007
- Japan’s 10-year yield nears 3%, a three-decade high
- Germany’s 10-year Bund at highest since 2011; France highest since 2009
- Oil back above $90 a barrel is fueling inflation worries
- Foreign holdings of US Treasuries fell in June, led by Japan, UK, China
Rising yields across the world’s biggest bond markets are pushing borrowing costs to levels not seen in decades, and traders are bracing for more turbulence ahead.
Long-term government bond yields surged on Tuesday from the US to Japan to Germany, as inflation fears and mounting fiscal worries hit markets already on edge. When yields climb, bond prices fall, and right now the selling shows no sign of slowing.
Key Details
US 30-year Treasury yields touched their highest level since 2007, last trading around 5.32%, after climbing nearly 40 basis points in July alone, the sharpest monthly jump since December 2024. Oil prices crossed $90 a barrel as hopes for a US-Iran peace deal faded, adding fresh inflation pressure.
In Japan, yields hit their highest in 30 years amid bets the Bank of Japan could raise rates in September. Germany and France saw similar moves, with yields at their highest since 2011 and 2009.
Why It Matters
Saxo Bank’s Charu Chanana says investors are demanding a bigger premium to hold long-dated debt. Heavy bond sales from AI companies, growing deficits, and questions around Fed communication under new chair Kevin Warsh are all adding pressure.
Japan, the top foreign holder of US debt, trimmed its holdings in June as domestic yields turn more attractive.
Watch whether foreign demand for US debt holds up as supply keeps growing.
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Source: Reuters
