US 10-YEAR TREASURY YIELD HITS HIGHEST LEVEL SINCE 2002

The yield on the US 10-year Treasury note rose to its highest level since April 2002 on Thursday, climbing four basis points to 5.3338%, according to data from the London Stock Exchange Group. The 30-year Treasury bond yield increased three basis points to 5.6702%, its highest point since July 2002, while the 2-year yield rose two basis points to 4.91%. Yields and bond prices move inversely, and one basis point represents 0.01 of a percentage point. The rise formed part of a deepening global sell-off in government bonds.

Government borrowing costs have risen worldwide in recent months, which investors have linked to concerns over fiscal deficits, persistent inflation and rising interest rates. The Institute of International Finance said major economies face "persistently large deficits and rising interest expenses", challenges it described as long associated with debt-distressed emerging market governments. Japan's 10-year government bond yield reached 3.126%, its highest level in three decades, linked to a weaker yen and Bank of Japan rate increases. In Europe, Germany's 10-year bund yield rose to 3.6179%, its highest since 2008, while France's 10-year yield climbed to 4.9501% and Italy's rose to 4.7171%. The UK's 10-year gilt yield increased five basis points to 5.483%.

Analysts have linked the rise in US yields to persistent inflation, high levels of government borrowing and continued economic growth, which have kept expectations for interest rates elevated. Higher Treasury yields raise borrowing costs for US mortgages, car loans and credit card debt. Government borrowing costs have increased across the other affected economies, including the UK, Japan, Germany, France and Italy. The global sell-off in government bonds has continued for several months with no sign of easing, according to market reports.