Global Bond Sell-Off Pushes Yields to Highest Levels
A global wave of bond selling intensified, unsettling investors, as strong U.S. economic data and weak demand in a debt auction pushed Treasury yields across most maturities to their highest levels in nearly two decades.
The severe losses on Wall Street extended into the Asia-Pacific region, with bonds declining in Japan, Australia, and New Zealand. According to Bloomberg Middle East, the yield on the 10-year U.S. Treasury note stabilized at 5.12% during Asian trading, after jumping 15 basis points on Wednesday, marking the largest increase since the turmoil triggered by President Donald Trump’s announcement of tariffs in April 2025.
Weak demand in an auction for five-year notes pushed their yield above 5% for the first time since 2007. The yield on 30-year Treasury bonds approached 5.44%, the highest level in over two decades. The Bloomberg Dollar Index hovered around levels last seen in July, as traders priced in further interest rate hikes by the Federal Reserve.
Despite some relief from oil, with Brent crude narrowing Wednesday’s gains and trading down 0.9% at around $102.20 per barrel, equities barely benefited. Asian stocks followed Wall Street indices lower, while futures on stock indices suggested losses could also extend to Europe.
The likelihood of rising energy costs coinciding with the continued strength of the U.S. economy is increasing pressure on the bond market, which is already experiencing volatility due to weak auction demand and concerns that interest rates will remain high.
With Treasury yields surging and the average yield on global government debt approaching 4%, traders increased their bets on further monetary tightening by the Federal Reserve, following the first rate hike since 2023 approved last week.
In Japan, the 10-year bond yield rose to its highest level since 1996. The Australian equivalent recorded its largest increase in nearly two weeks, while the New Zealand yield for the same maturity saw its biggest jump since early March.
