Global bond sell-off deepens

Japan’s 30-year government bond yield hit 4% for the first time as a global bond sell-off extended into Monday, according to the Guardian’s live business coverage. US Treasury yields also rose, with the benchmark 10-year yield touching its highest level since early 2025 as investors repriced the odds of near-term rate cuts. The moves come as the Strait of Hormuz remains largely closed, keeping markets focused on the inflationary aftershocks of disrupted energy flows.

The immediate channel is straightforward: higher oil and gas prices feed into transport and food costs, and bond investors demand more compensation for the risk that central banks will have to keep policy tighter for longer. ING analysts cited by the Guardian argue that even an abrupt end to the Iran war might not quickly unwind the price pressure because oil inventories have been drawn down, leaving less buffer against further disruption. Natural gas prices, they add, “appear too low” given the possibility of extended supply constraints, and could rise if the situation drags into the third quarter.

That scenario forces a second round of adjustments. Governments refinancing debt face higher interest bills at the same time as voters push for relief from energy costs, a combination that narrows fiscal room without a formal vote to raise taxes. Traders, meanwhile, treat policy guidance as conditional: expectations can flip from “cuts soon” to “hikes next” based on a handful of energy and shipping headlines. The Guardian reports that losses spread across major bond markets from Tokyo to Washington, with eurozone debt also falling as the market priced a tougher rate path.

The knock-on effects show up in commodity logistics rather than just the futures curve. The Guardian notes intensifying competition between Asian and European buyers for liquefied natural gas, a bidding contest that can redirect cargoes and shift price spikes across regions. For central banks, energy becomes the variable that dominates the rest of the data: if households and firms keep paying more for essentials, wage demands and price-setting behavior can change long after the initial shock.

G7 finance ministers were due to meet in Paris the same day, while the IMF prepared to publish its Article IV report on the UK. In bond markets, the day’s most concrete signal was the price: longer-dated government debt demanded higher yields before anyone had announced a new policy.