The bond market is facing a severe sell-off as inflation fears mount due to ongoing geopolitical tensions from the Iran war. This situation has led to a significant rise in global government borrowing costs, affecting countries from Japan to the United States. Notably, the yield on Japan's 30-year bond has reached a record 4.200%, while U.S. Treasury yields for 10-year bonds have surged to 4.6310%, the highest level since February 2025. Analysts from ING highlight that even if the conflict were to cease, energy prices may not decrease as expected due to substantial drawdowns in oil inventories. Furthermore, natural gas prices are considered too low, with potential upward pressure if disruptions continue. Compounding these issues, China's economic data has disappointed, with factory output growth slowing to 4.1% in April, raising concerns about a deceleration in growth. As oil prices rise, with Brent crude now at $111.16 per barrel, the pressure on bond prices is likely to persist. The G7 finance ministers are scheduled to meet in Paris to discuss the implications of these developments, emphasizing the global impact of the bond market's current turmoil.