Why are Japanese government bond yields surging?

Japanese government bond yields are surging due to expectations of increased fiscal spending and stimulus, potentially linked to upcoming elections.

How are global bond markets affected by Japan's yields?

Global bond markets are under pressure as rising Japanese yields can lead to reallocation of funds and increase fears about debt and fiscal spending worldwide.

What role do US tariff threats play in the bond sell-off?

US tariff threats against European allies over Greenland, along with trade talk resurfacing, add to market volatility and pressure on bonds like US Treasuries.

Home / Business and Economy / Global Bonds Jolt as Japan Yields Hit Record Highs

Global Bonds Jolt as Japan Yields Hit Record Highs

21 Jan

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Summary

Japanese government bond yields surged to record highs, impacting global markets.
Investor fears grew over increased fiscal spending and rising national debt levels.
US tariff threats and tensions over Greenland amplified bond market pressures.

Global Bonds Jolt as Japan Yields Hit Record Highs

Global bond markets experienced significant pressure following a surge in Japan's borrowing costs to record highs. Ten-year Japanese government bond yields climbed nearly 19 basis points in two days, the steepest increase since 2022, while 30-year yields saw their largest daily jump since 2003 as investors anticipate increased government stimulus. This situation has heightened concerns about rising national debt levels worldwide.

Further exacerbating market volatility, US President Donald Trump's tariff threats against European allies concerning Greenland have surfaced. This, coupled with renewed 'Sell America' trade discussions, intensified selling pressure on US Treasuries. Danish pension fund AkademikerPension announced plans to sell its $100 million in US Treasury holdings. Benchmark German and UK 30-year bond yields also climbed, reflecting broader anxieties about fiscal spending and debt supply.