Japan’s 10-year government bond yield reached 3% on September 1, a level not seen since 1996. This increase represents more than 1.4 percentage points added to the benchmark yield since August 2025, in a country where negative interest rates were the norm just two and a half years ago. This surge is driven by three factors: climbing inflation expectations linked to oil prices above $85 per barrel, the Bank of Japan’s monetary normalization that raised its policy rate to 1% in June, and record budget requests of approximately 143 trillion yen. Japan’s public debt exceeds 200% of GDP, and the reality of a 3% rate significantly changes the outlook for government financing costs.
Source: Read the original article
