Renewed US-Iran tensions push Asia-Pacific sovereign bond yields higher along with rising oil prices

According to Golden Ten Data on July 8, as crude oil prices rise, government bond prices across the Asia-Pacific region are falling. Two strategists from OCBC Research said in a report that the latest increase in crude oil prices “reminds people that inflation risks, hawkish central bank expectations, and terms-of-trade pressures could re-emerge quickly.” The strategists pointed out that the rise in oil prices occurred “as tensions between the US and Iran resurfaced after Washington withdrew waivers on Iranian oil sales following attacks on three ships in the Strait of Hormuz.” The yield on Australia’s 10-year government bond rose by 6 basis points to 4.8820%; New Zealand’s 10-year government bond yield climbed by 8 basis points to 4.5080%; and Japan’s 10-year government bond yield increased by 2.5 basis points to 2.865%.