By Swann Collins, investor, writer and consultant – Eurasia Business News. July 15, 2025. Article no 1625.
Japan’s 20-year government bond yield rose to its highest level this century, reaching about 2.65% on July 15, a level not seen since November 1999. This surge reflects growing market concerns over Japan’s fiscal outlook ahead of the July 20 upper house election.
The increase in long-term bond yields, including the 30-year yield hitting a record high of approximately 3.20%, is driven by fears that a possible defeat of the ruling coalition could lead to policies such as consumption tax cuts. These tax cuts would likely increase fiscal spending and bond issuance, thereby raising borrowing costs.
Heightened inflationary pressures and public discontent due to rising living costs have intensified investor apprehension.
In June 2025, Japan’s inflation rate rose to 5.4%, up slightly from 5.3% in May, according to the latest data. This increase marks a continuation of elevated inflation levels above the Bank of Japan’s 2% target.
Market strategists note that government fiscal policy post-election will be pivotal for the direction of Japanese government bonds. The Bank of Japan currently owns about half of Japan’s government bonds, which has limited yield increases until now, but the political uncertainty is challenging this control. The 10-year yield also climbed to its highest level since 2008, around 1.595%, signaling broad-based pressure on Japan’s debt market.
Read also : Gold : Build Your Wealth and Freedom
Japan’s 20-year bond yield spiked to multi-decade highs amid election-related fiscal worries, reflecting investor concerns about potential increases in government spending and the impact on Japan’s long-term fiscal health.
Since January bond yields have been surging around the world, adding pressure on public debts.
Our community already has nearly 150,000 readers!
Subscribe to our Telegram channel
Follow us on Telegram, Facebook and Twitter
© Copyright 2025 – Eurasia Business News. Article no. 1625
Eurasia Business News 