Tokyo, July 09 (QNA) – The yield on Japan’s benchmark 10-year government bond briefly hit 2.900 percent Thursday afternoon for the first time since November 1996 amid fears over a flare-up of tensions in the Middle East and their impact on energy prices and inflation.

Government bonds have come under pressure as renewed attacks between the United States and Iran pushed crude oil futures up, fueling concerns about inflation in Japan as the resource-poor nation is heavily reliant on energy imports, the Japanese Kyodo news agency reported.

Concerns about Japan’s financial situation and the government’s fiscal policy also contributed to the accelerated bond sell-off, given the inverse relationship between bond yields and prices.

The US dollar stayed strong, trading mostly around the mid-162.5 yen level in Tokyo, driven by increased demand amid escalating geopolitical tensions.

Despite such growing concerns, stocks remained firm, with the benchmark 225-issue Nikkei index briefly gaining more than 2 percent, driven by heavyweight semiconductor-related shares amid optimism about chip companies’ growth prospects. (QNA)