Japan's stocks and bonds sank to multi-month lows on Monday as an escalation in the Middle East war stoked inflation fears and concerns over an economic slowdown. The Nikkei slumped as much as 5% earlier in the session, wiping out the gains it made this year. The index ended 3.48% lower at 51,515.04. The broader Topix was down 3.41% at 3,486.44. Both indexes ended at their lowest close since January 8. The 10-year Japanese government bond yield jumped as much as 6 basis points to 2.320%, its highest point since January 21, and was last traded at 2.305%.