Treasury yields continued their climb on Wednesday despite a fresh $6 billion buyback of long-term government debt, as investors remained focused on inflation risks, rising oil prices and the growing U.S. borrowing burden.

The 10-year Treasury yield rose to 4.856%, its highest level since October 2023. The increase came even after the Treasury Department announced that it would repurchase $6 billion of Treasuries with maturities between 10 and 20 years.

The buyback program is intended to improve liquidity in the Treasury market and reduce some of the upward pressure on longer-term borrowing costs. Instead, yields moved higher, with the 30-year Treasury rate breaking above 5.3% and moving toward its August peak.

For bitcoin, the rise in bond yields presents a potential headwind. Longer-duration Treasury securities are offering returns of roughly 4%-5%, increasing the opportunity cost for investors who choose to hold bitcoin instead of government debt.

Still, rising yields are not necessarily negative for risk assets when they are being driven by strong economic growth. The current environment appears different, with fiscal concerns, inflation and energy prices playing a larger role in the move.

Analysts have previously argued that Treasury buybacks may have only a limited impact on long-term yields. The government’s expanding debt load and increased fiscal spending mean that more Treasury issuance is likely, forces that remain largely beyond Treasury Secretary Scott Bessent’s control. The buybacks also do not tackle the deeper issue of elevated government spending.

The upward move in yields has spread beyond the U.S. Bond yields in Europe and Japan have also increased as investors assess persistent inflation, higher energy costs and questions over the long-term sustainability of government borrowing.

The latest $6 billion operation follows the Treasury’s earlier announcement that it planned to at least double its long-duration buybacks from the typical $2 billion size. Yields initially declined after that announcement but later reversed course and moved sharply higher.

By buying longer-term securities while continuing to finance government operations through shorter-term debt, the Treasury can change the maturity composition of its liabilities. However, the strategy does not reduce the government’s overall financing requirements.

The bond-market moves also followed coordinated efforts by the United States and Japan to support the Japanese yen.

Earlier this week, Bessent challenged currency traders to bet against the intervention, saying, “I am the house now.” A stronger yen is also beneficial to Washington because it lowers the pressure on Japan to sell U.S. Treasuries to fund additional currency intervention. Japan remains the largest foreign holder of U.S. government debt.

Meanwhile, WTI crude has risen to around $97 per barrel, matching its May high. The jump in oil prices has fueled concerns that higher energy costs could keep inflation elevated, potentially complicating the Federal Reserve’s policy decisions.

Despite the yen’s sharp rebound, the U.S. Dollar Index remains near 99, adding to pressure on risk assets. Bitcoin, meanwhile, has continued to consolidate around $78,000 after surging from roughly $63,000 in mid-August.