Asian Bond Selloff Eases as Iran War Keeps Oil Near $110 and G7 Borrowing Near 4%
Updated
Updated · Reuters · May 19
Asian Bond Selloff Eases as Iran War Keeps Oil Near $110 and G7 Borrowing Near 4%
12 articles · Updated · Reuters · May 19
U.S. Treasury and Japanese government bond yields eased in Asia on Tuesday, slowing a global selloff that had driven sovereign borrowing costs toward decade highs.
Oil fell after Donald Trump said he had paused a planned strike on Iran and saw a strong chance of a nuclear deal, but crude still hovered around $110 a barrel—more than 50% above prewar levels.
That has kept investors focused on a lasting inflation shock from the nearly three-month Iran war, with the average 10-year borrowing rate for G7 governments approaching 4% from about 3.2% before late February.
G7 finance ministers meeting in Paris acknowledged rising concern over public debt and bond-market volatility as they sought common ground on broader economic tensions.
Japan's first-quarter growth beat forecasts, but the yen stayed weak near 159 per dollar, underscoring how the energy shock is still clouding the outlook for households, businesses and policymakers.
With the Strait of Hormuz closed, is the world heading for a crisis in food and medicine supply?
Is a lasting peace deal possible when U.S. and Iranian nuclear red lines seem completely irreconcilable?
Can Iran's 'shadow economy' and new trade routes defeat the most powerful naval blockade in modern history?
Global Economic Shock: Market Volatility, Energy Crisis, and Geopolitical Upheaval from the 2026 Middle East Conflict
Overview
The ongoing Middle East conflict has triggered immediate and significant reactions across global financial markets, with G7 finance ministers meeting in Paris to address the economic fallout. Investor apprehension over the conflict’s trajectory has led to notable swings in bond and currency markets, reflecting heightened geopolitical uncertainty. These market movements are driven by escalating tensions and fears of broader economic consequences, including energy supply disruptions and rising inflation. As the situation evolves, the interconnectedness of geopolitical events and financial markets underscores the urgent need for coordinated international responses to manage the risks and ripple effects stemming from the conflict.