Mumbai, July 8 -- Indian government bond yields surged, and the rupee weakened sharply on Wednesday after US President Donald Trump declared that the memorandum of understanding with Iran was 'over,' reigniting fears of prolonged tension in West Asia and sending crude oil prices sharply higher.

The yield on the 10-year benchmark government bond climbed about 7 basis points to end at 6.76%, marking its steepest single-day rise in almost seven weeks. The rupee slipped 0.6% to end at 95.56 (provisional) per US dollar, its weakest level in about a month, according to data by Bloomberg.

The rise in crude oil prices renewed concerns over inflation and India's external balances. Brent crude oil futures rose over 2% in the morning to $78 per ba...