G7 finance ministers acknowledged mounting concern over public debt and bond market volatility as they met in Paris on Monday in the wake of a bond market selloff triggered by fears over inflation risks from the Iran war.Ministers are set to discuss the economic fallout from the conflict and volatility on global bond markets, which are of particular concern to Japan, as they also seek common ground on tackling economic tensions and global imbalances.
Bonds from Tokyo to New York extended losses on Monday, with investors betting on central bank rate hikes over worries that rising energy prices could stoke inflation.
Asked if bond markets were collapsing, French Finance Minister Roland Lescure said: "They’re undergoing a correction - I wouldn't say they’re collapsing."
"We are no longer in a period where public debt is not a subject," he told reporters as he arrived at the meeting.
The meeting, which will also be attended by representatives from G7 central banks, will tackle how countries can co-ordinate their response to shocks such as inflation through temporary, targeted and reversible measures, the French finance ministry said.
