Japan's benchmark 10-year government bond yield jumped to its highest level in 30 years on Thursday, tracking a sharp rise in US Treasury yields overnight, while a weaker yen added to concerns over domestic inflation.
The 10-year Japanese government bond (JGB) yield rose 8 basis points to 3.055%, its highest level since August 1996. Bond yields move inversely to prices.
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The 30-year JGB yield also climbed 5.5 basis points to 4.125%, while other maturities had not traded as of 0035 GMT.
Japanese bond yields faced upward pressure as inflation concerns grew amid a weaker yen, Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust Asset Management, told Reuters.
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US Treasury yields posted their sharpest one-day increase since last year's Liberation Day market rout after stronger-than-expected purchasing managers' data renewed inflation concerns. A poorly received auction of five-year Treasury notes also pushed yields higher.
The US dollar rose to its strongest level in nearly two months on Wednesday as investors increased bets on a near-term Federal Reserve rate hike.
A weaker yen raises the cost of imported goods and raw materials, potentially adding to domestic price pressures and complicating the outlook for the Bank of Japan's monetary policy.
The rise in JGB yields was also reflected in futures trading. Ten-year JGB futures fell as much as 0.64 points, signalling further selling pressure on Japanese government bonds.
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