JGB yields climb as US-Iran tensions push oil higher

Japanese government bond yields rose on Thursday, with the benchmark 10-year JGB yield climbing 0.5 basis point to 2.690%.

The move extends a persistent upward trend in Japanese rates, driven by a combination of domestic inflation concerns and external geopolitical shocks.

The yield increase comes as escalating tensions between the United States and Iran have driven oil prices higher.

Rising energy costs are fueling broader inflation worries among traders, who are increasingly pricing in the risk that persistent price pressures could limit the Bank of Japan’s ability to maintain its current monetary stance.

The Strait of Hormuz remains a focal point for market anxiety, with shipping disruptions threatening to keep energy benchmarks elevated.

This session’s gain marks the seventh consecutive day of higher JGB yields, following a six-session streak that saw the benchmark rate reach 2.790% earlier in the week.