Japan’s 30-year government bond yield surged to 4.18%, approaching the all-time high of 4.20% set in May 2026. The 10-year yield climbed to 3%, a level not seen since 1996, amid a broader selloff in Japanese government bonds. Japan’s public debt exceeds 200% of GDP, totaling approximately $8 trillion equivalent, making it the most indebted developed nation in the world. Several forces are driving this rout: rising oil prices, geopolitical tensions in the Middle East, inflation pressures, and the record-large budget requests submitted by Prime Minister Sanae Takaichi’s government. Concerns are mounting over potential global spillover effects should Japanese investors repatriate their massive foreign bond holdings, particularly US Treasuries and European sovereign debt.
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