TOKYO (Aug 17): Japan's 10-year government bond (JGB) yield jumped to a three-decade high on Monday, tracking a slide in global debt as inflation pressures mounted and expectations around central bank interest rate hikes solidified.

The benchmark 10-year JGB yield climbed five basis points (bps) to 2.925%, a level last seen in September 1996. The yield has risen for six consecutive sessions, marking the longest winning run in more than a year. Yields move inversely to bond prices.

US Treasuries fell on Friday after an initial rally driven by weaker-than-expected retail sales data faded, while persistent Middle East tensions kept investors on edge with crude prices turning higher. Eurozone yields also ended higher last week.

"At present, a bearish outlook on government bonds is spreading globally, and the upward trend in yields is intensifying, which is a cause for concern," Keisuke Tsuruta, a senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, said in a note.

"On the domestic front, uncertainty surrounding the Bank of Japan’s (BOJ) pace of interest rate hikes and its terminal rate remains a key concern."

The two-year yield, the one most sensitive to BOJ policy rates, added 3.5 bps to 1.685%, the highest since May 1995. The five-year yield rose 2 bps to 2.155%, set for a record close.

The yield on the 30-year JGB advanced 5 bps to 4.06%, set for its highest close since July 7. The yield on the 40-year JGB, Japan's longest tenor, increased 4 bps to 4.115%, poised for its highest close since May 25.

Data released on Monday showed the Japanese economy expanded at an annualised 1.1% in the April-June quarter, versus a median forecast of 2.0% annualised growth. Private consumption was flat and capital spending fell 1.2% in the quarter.

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