"The sell-off appears to be being driven by several factors, including concerns over rising government debt levels, opposition to measures to cut borrowing, sticky inflation, and economic growth prospects. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, explains: Investors are demanding higher returns to hold bonds exposed to both inflation risk and elevated debt levels. Higher yields, in turn, push up borrowing costs for companies and weigh on valuations."
"The global sell-off in longer-term government debt is continuing, as concerns mount over fiscal sustainability and the health of the global economy. After losses across the bond and equity markets yesterday, there are fresh falls in Asia-Pacific markets today. Japan is now in the firing line from bond vigilantes, who are driving up borrowing costs (yields) by selling government debt, pushing down prices. The 30-year Japanese government bond yield has hit an unprecedented 3.255% today, Reuters reports, following the jump in UK, US and eurozone bond yields on Tuesday"
Global long-term government bond yields are rising sharply, driven by investor concern about fiscal sustainability, sticky inflation and uncertain growth prospects. Asia-Pacific markets fell after losses across bond and equity markets, with Japan particularly affected as bond sales pushed 30-year JGB yields to an unprecedented 3.255% and 20-year yields to levels last seen in 1999. Investors are demanding higher returns to hold debt exposed to inflation risk and elevated sovereign borrowing, which raises corporate borrowing costs and weighs on valuations. Rising yields are also creating political pressure in the UK and will draw attention to London and Paris.
Read at www.theguardian.com
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