Government bond markets in the US, Japan, Germany and France came under heavy pressure as higher oil prices, fiscal strain and uncertainty over monetary policy pushed yields sharply higher and weighed on equities. Tradeweb data showed the benchmark 10-year US Treasury yield briefly reached 4.81% on September 2, its highest level since January 2025, while the 30-year yield climbed to 5.29%, its highest since 2007, and the two-year yield rose to 4.4%. Japan’s 10-year government bond yield reached 3.03% on September 2 after touching 3% the previous day for the first time in 30 years. Thirty-year borrowing costs in Germany and France also reached their highest levels since 2011. The rise in yields, which corresponds to falling bond prices, has increased borrowing costs for households, companies and governments. A renewed military clash between the US and Iran in the Middle East drove oil prices higher, reviving inflation concerns and reducing expectations for interest-rate cuts by major central banks. Concern over sovereign debt burdens has also grown, with higher refinancing costs raising the risk of deeper borrowing and debt pressures for highly indebted countries. Expectations for a Federal Reserve rate increase later in September strengthened after Kevin Warsh, identified in the article as the Federal Reserve chair, said the fight against inflation was not over. Markets are also increasingly pricing coordinated tightening by the European Central Bank and the Bank of Japan. Mitsubishi UFJ’s Derek Halpenny said markets had entered a danger zone and warned that higher policy rates increase the risk of a stock-market collapse. South Korea’s Kospi fell 3.99% to 6,562.72 on September 2.