Asian government bonds fell in price terms Friday afternoon as rising crude oil prices stoked worries over higher inflation across the region.
Escalating Middle East tensions have heightened fears of supply disruptions in the Persian Gulf, pushing Brent crude above $100 a barrel this week for the first time in two months.
Underscoring fears that hostilities between the U.S. and Iran could deepen, U.S. Central Command said in a post on X that American forces successfully completed the 13th consecutive night of strikes against Iran. The forces "targeted Iranian military command centers, drone storage facilities, communication networks, coastal surveillance sites, and maritime capabilities to further diminish the threat Iran poses to civilian mariners and commercial vessels transiting the Strait of Hormuz," Central Command said.
"Oil rose, taking global bond yields higher as the balance of inflation risks tilts further in an unfavorable direction," said Taylor Nugent, senior economist at National Australia Bank, in commentary.
Yields on 10-year Japanese government bonds rose 3 basis points to 2.800%, those on 10-year Australian sovereign debt gained 8 basis points to 5.0780%, and yields on 10-year New Zealand government securities added 8 basis points to 4.7960%. Bond yields move inversely to prices.
Crude oil futures fell Friday in Asia after roaring back above the $100-a-barrel mark on Thursday. Front-month West Texas Intermediate oil futures declined 0.5% to $91.71 per barrel and front-month Brent crude oil futures were 0.4% lower at $100.28 a barrel, according to ICE data.
However, declines in oil may be curbed by prospects of continuing Middle East hostilities.
President Trump said the U.S. would hold Iran responsible for future attacks by Houthi militants following an assault on two Saudi Arabian tankers in the Red Sea. "The Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves," he wrote in a social-media post Thursday.
Hostilities in the Red Sea have raised concerns over further supply disruptions, as the waterway has served as an alternative route for Saudi Arabia's oil exports since the closure of the Strait of Hormuz, ANZ Research analysts said.
Meanwhile, equity markets across Asia-Pacific fell, tracking Wall Street's slide on Thursday. Earnings from Alphabet and Tesla have rekindled concerns over excessive spending on artificial intelligence. Japan's Nikkei Stock Average fell 2.9%, South Korea's Kospi dropped 5.3%, and Hong Kong's Hang Seng Index shed 1.3%.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
July 24, 2026 01:12 ET (05:12 GMT)
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