Global Bond Selloff Deepens as Debt and Inflation Fears Rise

Government bonds are loans that investors give to countries.

Their prices fell in a broad global selloff, which made governments pay more to borrow money.

Japan’s 10-year borrowing rate reached 3% for the first time since 1996.

Borrowing costs also increased in the United States, the United Kingdom and Germany.

Investors are worried about large government debts and budget deficits.

Higher energy prices could keep inflation high.

This may make it harder for central banks to lower interest rates.

Higher borrowing costs can also make mortgages and business loans more expensive.

Japanese investors may buy more bonds at home instead of investing overseas.

That could put additional pressure on foreign bond markets such as Australia’s.