10-year yields have been pushed to the highest level in four months.

The gap between shorter- and longer-term debts is used as a barometer for the economy, known as the yield curve, and this widened gap shows that inflation will be accelerated.

“Inflation fears are being sparked by oil price gains”, said Kazuaki Oh’e, a bond salesman in Tokyo at Canadian Imperial Bank of Commerce, the nation’s fifth-largest lender. “The trend has changed from deflation to neutral and that is damaging the bond market”.

The highest since Aug. 13, the yield on the benchmark 10-year note rose two basis points, or 0.02 percentage point, to 3.7 percent, according to BG Cantor Market Data.

The difference between 2 and 10-year Treasury note yields was 145 basis points at the beginning of year which rose to 283 basis points today. Gains in equities and a pull-back in Japanese government bonds may have helped fuel the drop in thin market conditions, the trader said.

For the month, data shows slower U. S. job losses and strong retail sales.