Global Market: Japan 30-year bond yield hits record high ahead of 10-year auction

Japan’s government bond yields climbed on Tuesday, with the 30-year yield hitting a record high as investors remained cautious ahead of a 10-year bond auction and assessed concerns over Prime Minister Sanae Takaichi’s expansionary fiscal policies.

The 30-year JGB yield rose 1 basis point to a record 4.24%, while the benchmark 10-year yield climbed 3 basis points to 3.115%. Japan’s finance ministry is scheduled to sell around 2.6 trillion yen ($16.5 billion) of 10-year notes later on Tuesday.

Investor sentiment has weakened amid concerns that increased government spending could further strain Japan’s public finances. Takaichi on Monday sought to reassure markets by pledging to control bond issuance and respond swiftly to excessive market volatility.


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According to Reuters, investors are also keeping a close watch on developments in France, where borrowing costs have risen sharply as concerns over the government’s plans for its 2027 budget have triggered a selloff in French debt. The government is seeking to reduce its deficit while dealing with a record-high debt burden.

The French bond market weakness has added to broader pressure on global government bonds, raising concerns that higher yields overseas could further weigh on JGBs.

Two-year JGB yields rose 2 basis points to 1.925%, while five-year yields gained 3 basis points to 2.39%. The 20-year yield increased 1 basis point to 2.98%, its highest level in three decades.

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Investors are now closely watching Tuesday’s 10-year auction for signs of demand. Weak demand could reinforce concerns about the sustainability of Japan’s fiscal position and put further upward pressure on domestic bond yields, Reuters reported.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)