Japan Bond Yields Cross 3% for First Time in Over 30 Years

Japan's benchmark bond yields crossed 3% for the first time since September 1996, sparking concerns over sticky inflation and fiscal risks. The recent surge in yields was fueled by rising energy import costs due to the U.S.-Iran war and bets on an imminent rate hike by the Bank of Japan.

The BOJ's shift towards tighter monetary policy has seen bond yields more than triple since 2024, with the current yield of just over 3% marking a significant milestone. The move is part of a broader trend across developed markets, where high inflation and government spending are pushing up yields in the U.S. and Europe.

The Japanese government's plans to increase spending and cut taxes have added to the fiscal risks, with Prime Minister Sanae Takaichi outlining measures to address economic concerns.