Japan’s 40-year bond yield hits 20-year high

Japan’s bond yield spike to 3.445% signals major economic instability. The Bank of Japan faces pressure to raise interest rates amid persistent inflation and a high debt-to-GDP ratio exceeding 250%. This scenario has contributed to Japan’s economic contraction in early 2025.

The instability in Japan’s bond market could trigger repercussions for economies worldwide. Rising borrowing costs could affect both developed and emerging markets, posing risks of financial distress and currency devaluation across global economies.