Japan Bonds Drop as Inflation Fears Quash Impact of 10-Year Sale

Japanese government bonds fell Tuesday, even after firm demand at a sale of 10-year notes, underscoring broader concern that yields don’t fully price in inflation risks.

The decline in Japan’s debt market largely mirrored moves globally as the Iran war has raised the prospect of higher inflation. Government bonds from the US, Australia, South Korea and Indonesia have all dropped this week.