Macro Markets Warns That Rising Japanese 30-Year Yields Could Threaten Risk Appetite

Japan’s 30-Year Yield Surge Raises Red Flags for Global Markets

A surge in Japan’s long-term government bond yields is stoking fresh concerns about global market stability, as investors grow uneasy over the nation’s fiscal outlook and looming elections.

Over the past few days, yields on Japan’s superlong bonds have risen sharply, signaling tighter financial conditions that could weigh on riskier investments worldwide.

The yield on Japan’s 30-year government bond has soared more than 30 basis points, breaking past 3% for the first time since late May, when it touched 3.20%, data from TradingView shows. Meanwhile, the 40-year yield has climbed nearly 15 basis points to 3.36%.

Analysts point to growing fears that upcoming Upper House elections may lead to looser fiscal policy. Prime Minister Shigeru Ishiba continues to support direct cash handouts, while opposition parties are advocating tax cuts.

Compounding the uncertainty is U.S. President Donald Trump’s announcement of new 25% tariffs on Japanese exports, further rattling investor sentiment.

Potential Ripple Effects on Global Markets

Japan’s rising ultra-long yields could ripple through the broader global bond market, potentially lifting yields in the U.S. and other major economies. Higher yields often bring increased volatility and tighter financial conditions, posing a threat to risk assets, including bitcoin and other cryptocurrencies.

Traders are closely tracking the MOVE index, which measures implied volatility in U.S. Treasury markets. Historically, bitcoin price peaks have coincided with lows in the MOVE index, and significant market shifts can follow reversals in bond volatility.

Eyes on Thursday’s 20-Year Bond Auction

Market attention now turns to Japan’s upcoming 20-year bond auction scheduled for Thursday. Bloomberg notes that these auctions frequently suffer from weak demand, which could lead to further yield spikes if investor appetite falters.

Japan Moves Away from Ultra-Low Rate Era

Japan’s long tradition of ultra-low interest rates—once a cornerstone for global bond markets and currency carry trades—is shifting. Since 2023, the Bank of Japan has gradually started normalizing policy, pushing global yields higher and signaling an end to decades of aggressive monetary easing.