Japan 30-Year Bond Yield Hits Record High Near 3.5% as Fiscal Worries Mount

⬤ Japanese government bond yields are spiking, with the 30-year benchmark now knocking on the door of 3.5%—a level never seen before. The JP30Y has climbed about 50 basis points since November, marking a dramatic repricing in the long-term market segment. Recent trading shows JP30Y sitting just below the 3.5% threshold, underscoring how fast and hard yields are pushing into uncharted territory for Japan's bond market.

⬤ This isn't just a long-end story. The 10-year Japanese government bond yield has blown past 2.13%, hitting its highest point since the 1990s. Investors are responding to what many see as a worsening fiscal picture in one of the world's biggest economies. The sharp climb across different maturities shows this shift in sentiment toward Japanese government bonds has been both persistent and widespread over recent months.

⬤ Fiscal policy is pouring fuel on the fire. Japan greenlit a record ¥122 trillion budget (roughly $780 billion) for Fiscal Year 2026 last month, with a major bump in defense spending included. That's sparked worries about ballooning borrowing needs and rising long-term funding costs, which have fed directly into the latest JP30Y surge. Market watchers are calling the move extraordinary—a reflection of just how unusual things have gotten for Japan's historically low-yield bond market.