Japan’s Bond Yields Surge to 17-Year High, Stirring Global Market Jitters
Japan’s 10-year government bond yield climbed to 1.61% on Tuesday — its highest level since 2008 — following a poor 20-year bond auction that reflected weak investor appetite and rising concerns over Japan’s fiscal trajectory.
The lackluster auction deepened fears about long-term government spending and tax cuts, driving up yields across the curve. The 20-year yield jumped to 2.64%, while the 30-year reached 3.19%, according to TradingView data.
The sharp move signals growing pressure in Japan’s debt markets and raises the risk of spillover into global bonds, particularly U.S. Treasuries. A rise in global yields could tighten financial conditions and weigh on appetite for risk assets like stocks and cryptocurrencies.
Policy Debate Intensifies
Calls for monetary tightening are growing louder. Senior ruling party member Taro Kono told Reuters that Japan should raise interest rates to counter inflation and support the yen. His remarks echo recent comments by U.S. Treasury Secretary Scott Bessent, who urged the Bank of Japan (BOJ) to step in and stabilize the currency.
The BOJ ended its ultra-loose monetary policy last year and raised short-term rates to 0.5% in January. However, it has kept rates on hold since then, even as inflation persists and the yen remains under pressure.
With long-end yields rising and political pressure mounting, markets are now eyeing the BOJ’s next move — and the potential global fallout.
