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[US-Iran Conflict Fuels Inflation Fears, Japanese Government Bond Yields Rise Across the Board] 1. On Thursday, Japanese government bond yields generally rose, mainly due to the escalating tensions between the US and Iran pushing up international oil prices, deepening market concerns about the inflation outlook. The benchmark 10-year Japanese government bond yield rose to 2.697%. 2. This yield increase is a direct reaction to the fourth consecutive day of rising oil prices. A new round of US airstrikes on Iranian military facilities exacerbated market concerns about a potential resurgence of full-blown conflict and supply disruptions in the Strait of Hormuz. The yield on 30-year Japanese government bonds rose sharply by 6 basis points to 3.81%, and the yield on 20-year bonds rose by 1.5 basis points to 3.56%, having risen as much as 4 basis points during the session. 3. Japanese Prime Minister Sanae Takaichi stated on Wednesday that she believed the government's draft economic blueprint was unrelated to the recent bond market sell-off, attempting to calm market sentiment. However, analysts at Mitsubishi UFJ Morgan Stanley Securities pointed out that although the government has recently taken measures to address rising interest rates, there is still a gap between the market's focus on fiscal expansion and increased government bond issuance and the government's view of the situation, and concerns about fiscal risks persist. 4. Short-term government bonds, most sensitive to the Bank of Japan's policy rate, rose in tandem, indicating continued uncertainty in the market's pricing of the Bank of Japan's future interest rate hike path, while concerns about inflationary pressures continue to suppress bond prices. 5. Overall, the dual pressures of external inflationary pressures and internal fiscal concerns are putting sustained pressure on the Japanese bond market. In the short term, the market's focus remains on the development of the Middle East situation and the further impact of oil price trends on inflation expectations, as well as the Bank of Japan's policy response signals.