Selling grips bond markets from US to Japan as inflation, fiscal worries take hold

LONDON, Aug. 18 (Reuters) - Long-term borrowing costs from the United States to Japan and Germany rose to their highest levels in decades on Tuesday, as renewed inflation worries added to lingering concerns of fiscal pressures across major economies, dealing bond markets a fresh blow.

Thirty-year bond yields in the United States, the world's most systemically crucial government bond market, hit their highest since 2007 as oil prices rose back above $90 a barrel, fanning inflation worries as U.S.-Iran peace hopes faded.

In Japan, inflation angst and expectations that the Bank of Japan could hike interest rates as early as September pushed benchmark 10-year borrowing costs to a three-decade high just under 3% JP10YTN=JBTC.

And over in Europe, Germany's 10-year Bund yield touched its highest since 2011 DE10YT=RR, while French yields were at their highest since 2009 FR10YT=RR. When a bond's yield rises, its price falls.