Ten-year US and French government bond yields hit 5.34 and 4.99 per cent respectively last week, their highest since 2002, while crossing 3.1 per cent for Japan, the first time after 1996. The increase in borrowing costs for the governments of these countries over the past one year works out to 1.2-1.4 percentage points. That’s roughly twice the 0.7 percentage points rise in the 10-year Indian government security yield, which closed the week at 7.21 per cent. Simply put, investors are demanding higher returns from governments on the tradable debt instruments issued by them that, being backed by the sovereign’s power to tax and print currency, are ostensibly default........

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