2026-01-05 19:15:14

Japan’s bond market situation is getting worse:

Japan's 10Y government bond yield has surged to 2.12%, the highest since 1999.

At the same time, the 30Y yield is up to 3.46%, the highest on record.

Since the start of 2025, both yields have skyrocketed +104 and +120 basis points, respectively, marking one of the most dramatic repricing events in Japanese bond market history.

This comes as investors are pricing in higher deficit spending as the government approved a record $780 billion budget for FY2026.

At the same time, persistent yen weakness has intensified concerns that the Bank of Japan is falling behind the curve on inflation control.

Japan's bond market losses are accelerating.

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