Global Bond Selloff Pushes Japan 30-Year Yields to Multi-Decade Highs

Global financial markets are experiencing a significant sell-off in long-term government bonds, with Japan's ultra-long bonds joining the decline amid rising yields and political uncertainty. Japan's 30-year government bond yields hit record highs above 3.25%, levels not seen since their debut, while 20-year yields reached their highest since 1999, driven by concerns about inflation, elevated debt-to-GDP ratios, and the prospect of the Bank of Japan raising interest rates. Political instability is compounding investor worries, as the resignation of a close aide to Prime Minister Shigeru Ishiba and potential leadership changes in the ruling Liberal Democratic Party raise questions about future fiscal policy, including possible increased government spending. The global bond sell-off is also impacting other major economies, with US 30-year Treasury yields approaching 5%, and UK long-dated bond yields hitting their highest levels since 1998, pressuring respective governments to address budget deficits. These developments are causing broader market weakness, including falling equity prices and currency fluctuations, as investors weigh the risks of tighter fiscal conditions and inflationary pressures worldwide. The situation remains fluid with markets closely monitoring upcoming auctions and political events in Japan, the UK, and France for further indications of fiscal and economic policy directions.