Investors shed government bonds around the world, propelling borrowing costs to multi-year highs from Japan to the US amid intensifying fears that war-driven inflation will force central banks to pursue higher interest rates.

In the US, the yield on two-year Treasuries climbed to 4.06%, a level not seen since March 2025. Japan’s 30-year yield hit 4% for the first time since 1999. A political crisis in the UK lifted 30-year gilt yields to a 28-year high.