JGB Yields Hit 30-Year Highs as Record ¥9.3 Trillion Foreign Inflows Return

2 articles · Updated · CNBC · Jul 13

¥9.3 trillion flowed into 20- to 30-year Japanese government bonds in 2025, a record return by foreign investors as yields climbed to levels unseen in decades.
The 10-year JGB touched 2.901% last week—its highest since 1996—and the 20-year reached 3.901%, driven by BOJ normalization after ending yield-curve control in 2024 and by fiscal worries around Tokyo's spending plans.
Investors are split on whether the selloff has created value: some call long-dated JGBs the world's most attractive bond market, while others still prefer Europe because ECB rates are higher and Japan's debt exceeds 200% of GDP.
Risk now centers on the ultra-long end, where a 30-year yield above 4.5% could force life insurers to sell, while any GPIF shift from its $1.8 trillion pool into domestic bonds could stabilize the market.
The shift is rippling globally as rising domestic yields pull Japanese money home—investors sold $29.6 billion of U.S. debt in the first quarter—removing a major buyer from deficit-heavy bond markets.

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Japan’s Currency Crisis: The 2026 Yen Collapse and Its Economic and Political Impact

Overview

The Japanese yen has reached historic lows against the dollar in mid-2026, driven by persistent selling pressure and structural challenges in Japan’s economy. Despite recent rate hikes and policy normalization efforts by the Bank of Japan, markets remain skeptical, expecting only cautious tightening. This skepticism, combined with active carry trades and political uncertainties, has kept the yen under pressure. Even government interventions have provided only brief relief, as underlying economic vulnerabilities and market expectations continue to outweigh policy actions. As a result, Japan faces significant challenges in stabilizing its currency and addressing the broader economic impacts of the yen’s decline.

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