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TOKYO - Benchmark Japanese government bond (JGB) yields rose to a fresh 27-year high on Monday, as investors fretted about inflationary pressures from the Middle East war, while a strong U.S. jobs report reduced expectations for an early interest rate cut.
The benchmark 10-year JGB yield rose 3 basis points (bps) to 2.410%, the highest since February 1999. Yields move inversely to bond prices.
"Ongoing instability in the Middle East is continuing to fuel concerns, and last Friday's strong U.S. payrolls data pushed up U.S. yields, so that was also a factor" in Monday's JGB moves, said Lisa Mochizuki, an analyst at SMBC Nikko Securities.
The two-year yield, the one most sensitive to Bank of Japan policy rates, increased 1 bp to 1.395%, a fresh 31-year high. The five-year yield rose 2 bps to 1.815%.
The 20-year JGB yield climbed 6 bps to 3.325%, while the 30-year and 40-year maturities were yet to be traded, as of 0133 GMT.
Longer-term bonds are likely to face more selling pressure ahead of Tuesday's 30-year bond auction, Mochizuki said.
U.S. President Donald Trump ratcheted up pressure on Iran, threatening in an expletive-laden Easter Sunday social media post to target Iran's power plants and bridges on Tuesday if the strategic Strait of Hormuz is not reopened, pushing oil prices higher.
U.S. nonfarm payrolls rose more than expected last month and the unemployment rate fell to 4.3%, data released on Friday showed, bolstering expectations the Federal Reserve will keep interest rates steady as it assesses growth, inflation and the economic fallout from the war with Iran.
(Reporting by Satoshi Sugiyama; Editing by Subhranshu Sahu)





















