Japanese government bond yields rose after sharp overnight gains in U.S. Treasuries, driven by strong U.S. economic data and expectations of further Federal Reserve rate increases. The JGB yield curve steepened, with the two-year yield up 2 basis points at 1.920%, the 10-year yield 3.5 basis points higher at 3.110% and the 40-year yield up 5.5 basis points at 4.255%. Further U.S. tightening could accelerate the dollar’s appreciation against the yen, increasing speculation that the Bank of Japan may raise rates to mitigate upside risks in inflation. Investors were also focused on developments in the Middle East conflict and a U.S.-China summit meeting.