JAPAN'S 10-YEAR BOND YIELD HITS 30-YEAR HIGH ON US TREASURY SELLOFF

Japan's benchmark 10-year government bond yield rose to 3.055% on Thursday, up eight basis points, according to market data cited in the report. The level marks the highest reading since August 1996, a span of roughly three decades. The rise followed a surge in US Treasury yields, which climbed to their highest levels in nearly two decades across the curve. Japan's 30-year bond yield also increased, rising nearly seven basis points to 4.134%. The five-year yield climbed to a record high of 2.345%, up seven basis points on the day.

Analysts at UOB said the US bond sell-off was driven by rebounding oil prices, stronger-than-expected US purchasing managers' index data, and weak demand at a $70 billion five-year US Treasury auction, which pushed five-year Treasury yields above 5%. A weaker yen has added to concerns about inflationary pressure in Japan, according to the report. Earlier in the month, Japan's benchmark borrowing costs had already climbed to their highest level in three decades. That earlier rise came after US Treasury Secretary Scott Bessent signalled he expected Tokyo and the Bank of Japan to act in support of the falling yen.

Separately, US 30-year Treasury yields rose to their highest level since 2004, according to separate market data, as an extended sell-off in government bonds deepened. The sell-off has been attributed to concerns over inflation and government fiscal positions. The moves reflect sustained upward pressure on borrowing costs across major government bond markets. Rising yields in Japan and the United States affect government borrowing costs and can feed through to mortgage and lending rates more broadly.