Government bonds sold off globally on Wednesday, extending a rout that has driven borrowing costs to multi-decade highs

The yield on German 10-year bunds

, the benchmark for the euro area, was 4 basis points higher at 3.378% on Wednesday — its highest level since 2011. Japan's 10-year yield stood at 3.016%, after crossing 3% for the first time in three decades on Tuesday.

The 10-year Treasury yield

 touched its highest level since November 2023 at 4.814%, as British 10-year gilts

 marked a fresh post-2008 high of 5.25%, before both retreated slightly.

Yields move in the opposite direction to prices.

Investors have been rattled by the resurgence of inflationary pressures, particularly as a fresh wave of conflict in the Middle East drives oil

 prices higher. That has added to longstanding concerns about the fiscal positions and high debt loads of major economies from the U.S. to Japan and France.

Central banks around the world are meanwhile seen preparing for a string of interest rate hikes this month, typically bad news for bonds. Federal Reserve Chair Kevin Warsh struck a hawkish tone in his closely watched speech in Jackson Hole last week, while the Bank of Japan is seen potentially raising rates to support a falling yen, and markets are fully pricing a rate hike by the European Central Bank following the release of EU inflation data on Tuesday.