Benchmark 10-year government bond yields in five major economies have reached multi-decade highs this week. The US and UK hit levels not seen since 2007, while Japan reached a peak unseen since 1996. Germany and France also saw their yields climb to levels not recorded since 2009 and 2008, respectively.
The surge follows rising oil prices, which have exceeded $100 per barrel, fueling inflation concerns. Analysts note that Japan is particularly exposed due to a debt load exceeding 200% of its gross domestic product. France is also identified as highly vulnerable due to its large fiscal deficit and reliance on external capital.
Market participants are currently awaiting central bank meetings, including the Federal Reserve's upcoming rate decision. Traders are pricing in a high probability of a rate hike, which could influence the ongoing global bond selloff. This synchronized movement reflects a broader repricing of sovereign risk and inflation expectations.
