Asian government bonds fell in price terms Friday morning 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 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 the U.S. military launched another night of strikes against Iranian targets. "This is the 13th consecutive night of strikes aimed to hold Iran accountable and diminish threats from the Islamic Revolutionary Guard Corps to commercial shipping," Central Command said.
"Oil rose, taking global bond yields higher as the balance of inflation risks tilts further in an unfavourable direction," said Taylor Nugent, senior economist at National Australia Bank, in commentary.
Yields on 10-year Japanese government bonds rose 1 basis point to 2.780%, while 10-year Australian sovereign debt gained 7 basis points to 5.0600%. The 10-year New Zealand government securities added 5 basis points to 4.7720%. Bond yields move inversely to prices.
Crude oil futures held steady in Asia, underpinned by prospects that continuing Middle East hostilities could reduce oil shipments. Front-month West Texas Intermediate oil futures were little changed at $92.18 per barrel, while front-month Brent crude oil futures were flat at $100.67 a barrel, according to ICE data.
President Trump said that 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 of 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 Thursday's slide on Wall Street. Earnings from major technology companies, such as Alphabet and Tesla, have rekindled concerns over excessive spending on artificial intelligence. Japan's Nikkei Stock Average fell 2.6%, South Korea's Kospi dropped 2.8%, and Australia's S&P/ASX 200 benchmark index was down 0.5%.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
July 23, 2026 21:08 ET (01:08 GMT)
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