Long-dated yields are now testing how much the equity market can take. Rising borrowing costs are pressing on the valuations behind the AI rally just as the Nasdaq sits near records. Treasury buybacks and yen intervention have failed to cap yields, which suggests policy tools have limited reach against a market worried about supply and inflation. For Australia, higher global long-end yields tend to pull Australian government bond yields up with them. The Australian dollar is caught between a firmer US dollar and support from the RBA's expected hike on Tuesday. Japan's 10-year yield at its highest since 1996 adds another source of pressure: higher yields at home could draw Japanese money out of foreign bonds, including Treasuries. Gold faces headwinds from rising real yields, although demand as a hedge against fiscal risk offers some offset.---Energy costs, government borrowing and Fed hike bets are pushing long-dated yields up across the US, Germany and Japan. So far strong growth has cushioned the blow, but investors are already asking whether 6% is next.Summary:The US 30-year Treasury yield rose to near 5.5%, its highest since 2004. The 10-year reached around 5.2%, the highest since 2007The 10-year is up roughly 70 bps since the Fed's June meeting and about 125 bps since early MarchMost of the rise is attributed to expectations of further Fed hikes, with growth expectations and oil making up the restGermany expects record federal borrowing of around €525 billion this year. The Bund has hit a 17-year high and Japan's 10-year its highest since 1996Treasury buybacks and yen intervention have done little to slow the riseMortgage rates are around 7%, a two-year high, and 6% on the 10-year is emerging as the next pain thresholdThe global bond sell-off deepened on Thursday, with the US 30-year Treasury yield climbing to near 5.5%, its highest since 2004, Reuters reported. Investors are worried that high energy costs, resilient growth and heavy government spending will keep inflation elevated, and they have been selling long-dated debt. The benchmark 10-year yield reached around 5.2%, a level not seen since the summer of 2007.Bond markets around the world have been under pressure for months. The Iran war has lifted energy prices, and investors have grown increasingly uneasy about the scale of government borrowing. The speed of the move in US Treasuries, the deepest and most influential government bond market, has added to that concern. The 10-year yield has risen roughly 70 basis points since the Federal Reserve's June meeting and about 125 basis points since early March.Rate strategists attribute most of the rise since March to expectations of further Fed tightening, with stronger growth forecasts and higher oil prices accounting for the rest. Recent business activity surveys pointing to robust growth and building price pressures have raised the odds of another hike. New York Fed President John Williams said on Thursday that the economy was showing remarkable resilience. Longer maturities carry an extra layer of risk, because the 30-year yield also reflects how willing investors are to fund government borrowing in the years ahead.The pressure is global. Germany's finance agency expects federal borrowing to reach a record of around €525 billion this year and to rise again next year, driven by refinancing needs and special funds. The 10-year Bund yield briefly topped 3.6% this month, a 17-year high, and Japan's 10-year yield hit its highest since 1996 on Thursday.Efforts in Washington to contain borrowing costs have had little visible effect. Treasury Secretary Scott Bessent has intervened to buy yen, so that Tokyo does not need to sell Treasuries to support its currency. He has also expanded buybacks of 20- and 30-year debt. Yields have kept climbing regardless.So far, markets have taken the move in their stride. Nominal US growth ran at around 8% in the second quarter, corporate profits are booming and AI-led investment remains strong, with the Nasdaq hitting a record close on Tuesday. The strain is starting to show for households, however. Thirty-year mortgage rates have reached around 7%, a percentage point above pre-war levels and near a two-year high. Borrowing costs on car loans and personal loans are also rising, and refinancing has become far less attractive.With the 10-year now firmly above 5%, a level reached only briefly in recent decades, investors are starting to look at 6% as the next potential pain threshold. Whether yields get there will depend on how far the Fed is prepared to go, and on whether governments can convince bond buyers to keep funding them at current prices. What happens in bond markets ... does not stay in bond markets. This article was written by Eamonn Sheridan at investinglive.com.