The global bond selloff showed little sign of cooling, pushing yields toward levels not seen since the financial crisis as markets grappled with renewed geopolitical risk and mounting pressure on central-bank policy.
Japan’s long end led the move: the 30-year Japanese government bond yield reached 3% for the first time since 1996 after an intensifying campaign by U.S. Treasury Secretary Scott Bessent urging Tokyo to tighten policy further. The spike in Japanese yields added to global pressure on fixed income, with the U.S. 30-year Treasury entering September on its worst run since 2006.
Equities reacted unevenly to the repricing. European and mainland Chinese bourses slipped between 0.3% and 0.7% as investors digested the higher-rate environment and rising geopolitical tensions. Japan bucked the trend advancing about 0.6%. U.S. equity futures were weaker: Nasdaq futures fell roughly 1%, pressured by higher oil and continued stress in the bond market.
Inflation data in the euro area reinforced the cautious backdrop. Eurozone headline inflation rose to 3.3% in August from 2.9% in July — the highest reading in three years but broadly in line with market expectations — keeping the prospect of further ECB tightening on the table.
Energy markets were roiled by reports of renewed hostilities in the Strait of Hormuz. Two oil tankers were reportedly hit, sending Brent crude up about 2% to near USD 92 a barrel as traders priced in an elevated risk premium for Middle East supply routes.
In capital markets, newly listed Shein began trading in Hong Kong following its initial public offering. The e-commerce group pared early losses but closed the session essentially unchanged after at one point dropping about 10%, a sign of investor caution around big, high-profile listings in a volatile risk environment.
The confluence of rising yields, firmer inflation prints and geopolitical strain left markets treading carefully as investors reassessed the outlook for interest rates, growth and energy supply.
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