Japan's 10-year government bond yield reached a 30-year high. This surge intensified a global debt market sell-off that originated with U.S. Treasuries.
Strong U.S. business activity data triggered the rise in yields. Investors now anticipate persistent inflation and additional central bank interest rate hikes.
Rising yields increased borrowing costs and reduced the relative appeal of equities. The S&P 500 and Nasdaq declined as markets adjusted to a higher-rate environment.
Higher rates may expand net interest margins for banks. Rapid yield increases can also signal economic stress and impact loan demand.