US Attacks on Iran Trigger Global Bond Selloff

Oil prices climbed while equity markets slipped and bond yields surged after the United States carried out a new series of airstrikes on Iranian military targets. The escalation triggered a sharp sell‑off across global markets, with investors citing heightened geopolitical risk and a potential uptick in inflationary pressures. In Japan, the 10‑year government bond yield briefly breached the 3 % threshold, the first time the level has been reached since 1996, underscoring the widening concerns about fiscal sustainability.

The broader backdrop of the downturn includes a steep rise in U.S. government debt, now exceeding $40 trillion, and persistent inflation worries. In the Eurozone, consumer price inflation in August reached its highest point in three years, largely driven by surging energy costs. These developments have prompted central banks to tighten policy stances, further tightening market sentiment and contributing to the recent bond‑yield spike.

Market participants now face a dual challenge: navigating the immediate fallout from renewed U.S.–Iran tensions and managing the longer‑term implications of high debt levels and persistent inflation. As bond yields climb and equities retreat, investors are closely monitoring central‑bank responses and geopolitical developments that could shape the trajectory of the global financial landscape.