Japan's 10-year bond yield hits 30-year high after US Treasury selloff

Japan's 10-year government bond yield reached a 30-year high early on Thursday following a surge in US Treasury yields overnight, amid concerns of inflationary pressures. The benchmark 10-year JGB yield increased by 8 basis points to 3.055%, marking its highest level since August 1996. The 30-year yield also rose by 5.5 basis points to 4.125%.

Senior strategist Katsutoshi Inadome of Sumitomo Mitsui Trust Asset Management explained that Japanese bond yields are facing upward pressure due to growing inflation concerns stemming from a weaker yen. US Treasury yields jumped overnight, their sharpest daily increase since the market rout last year, after a stronger-than-expected purchasing managers' report fueled fresh inflation fears.

Simultaneously, the US dollar rallied to its highest level in nearly two months as investors anticipated a near-term Federal Reserve rate hike. As a result, the weaker yen raises import costs, leading to higher domestic prices.