Global bond selloff intensifies as US strikes on Iran fuel inflation fears
Fresh US attacks on Iranian targets have triggered a sharp rise in oil prices and a spike in bond yields, with Japan’s 10-year yield hitting a 30-year high.
Global financial markets have experienced a deepening selloff following fresh US military attacks on Iranian targets. The geopolitical escalation has led to a rise in oil prices, a decline in equities, and a significant spike in bond yields across major economies.
The market reaction is particularly stark in Japan, where the 10-year bond yield reached 3 per cent. This marks the first time the yield has hit this level since 1996, reflecting a broadening of the global sell-off in fixed income assets.
According to France 24, the selloff is driven by mounting concerns over rising inflation and the sustainability of government debt. In the United States, national debt has now exceeded 40 trillion dollars, adding to the pressure on investors seeking safe havens.
In the Eurozone, inflation reached its highest level in three years in August. The increase was primarily driven by higher energy prices, which have further complicated the monetary policy outlook for the single-currency bloc.
The current market environment underscores the link between geopolitical conflict and macroeconomic stability. As energy costs rise, the risk of persistent inflationary pressures continues to weigh on investor sentiment and government borrowing costs.
While the immediate impact of the US-Iran conflict on long-term inflation trajectories remains to be fully quantified, the current data suggests a period of heightened volatility for global bond markets.
