TOKYO, July 9 (Xinhua) -- The yield on Japan's benchmark 10-year government bond briefly touched 2.90 percent on Thursday afternoon, the highest level since November 1996, as escalating Middle East tensions rattled markets.

Pedestrians walk past a screen displaying stock market information in Tokyo, Japan, March 9, 2026. (Photo: Xinhua)

Government bonds have come under pressure as a resurgence of hostilities between the United States and Iran drove crude oil futures higher, stoking inflation concerns in Japan, an economy heavily reliant on the Middle East for imports of oil and other petroleum products.

Investor concerns have also been compounded by doubts over the debt-ridden country's fiscal health under Prime Minister Sanae Takaichi's "responsible and proactive public finances" approach, prompting further bond sell-offs and pushing yields up as prices fell.