TOKYO - ⁠Japanese government bonds plunged on Wednesday, driving yields to multi-decade and ‌record highs, as Middle East-driven inflation fears deepened a global bond selloff ahead of ​key bond auctions.

Japan's benchmark 10-year JGB yield rose 5 basis points (bps) to 2.590% ​and reached as ​high as 2.6%, the highest since May 1997. The policy-sensitive two-year yield climbed 1 bp to 1.4%, a level last seen ⁠in May 1995.

Yields on five-year and 20-year bonds also touched record highs.

Yields move inversely to bond prices.

The move mirrored sharp increases in yields on U.S. Treasuries, UK gilts, and euro zone bonds overnight ​after geopolitical risks ‌pushed crude prices ⁠higher.

A sale ⁠of 10-year JGBs on Tuesday saw moderately firm demand, but investors are now ​focused on upcoming auctions of longer-term securities scheduled ‌through the month.

"Demand at the auction was ⁠stronger than market expectations, but it is questionable whether that was based on real needs as there was a significant number of unidentified bids," said Shuichi Osaki, a senior portfolio manager at Meiji Yasuda Asset Management.

"Market players are cautious about betting on bonds ahead of a series of auctions this month."

Japan's finance ministry will auction a 30-year bond on Thursday and five-year debt on Friday, with ‌20-year and 40-year sales later this month.

Meanwhile, oil prices ⁠rose for a third consecutive day on Tuesday ​as hopes for a Middle East peace deal eased, raising concerns over disruptions through the Strait of Hormuz.

The BOJ has signalled a potential ​rate hike ‌as early as June, following hawkish opinions among board ⁠members at its April meeting.

(Reporting ​by Junko Fujita; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)