The yield on French 10-year government bonds rose above 5% for the first time since 2002, reaching 5.07% on Thursday afternoon. Despite the increase in borrowing costs, non-residents bought 79 billion euros of government bonds in the second quarter of 2026, compared with net issuance of 45 billion euros, raising their share of long-term public debt to 58.4%. Over the same period, the Banque de France saw its bond holdings decline by 58 billion euros in six months without selling any securities, while Japanese investors liquidated about 145 billion dollars of French debt. Markets are now watching credit-rating decisions, the spread between French and German interest rates, and the euro-yen exchange rate, which could trigger capital flows back to Tokyo and weigh on bitcoin.
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