Japan faces a tough inflation-growth trade-off – and it’s not alone

Bond markets are nervous about central banks’ ability to contain inflation as South Korea, Indonesia and the Philippines face similar pressures Global bond markets are throwing a tantrum. On August 17, the yield on 30-year US Treasury bonds hit 5.3 per cent, its highest level since 2007 and up from 4.8 per cent as recently as June 29. The average yield on long-term debt across the Group of 7 advanced economies is the highest since 2008. “The inability of policymakers to make progress on fixing the roof while the sun is shining is a key reason [long-term bond yields] remain so stubbornly high. So long as this persists, it will remain a risk for markets more broadly,” said Nohshad Shah at Citadel Securities.

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