Global Long-Term Bond Yields Surge Amid Fiscal Debt Concerns

Long-term government bond yields are rising globally amid growing concerns over fiscal deficits and public debt sustainability, overshadowing central bank interest rate policies. Japan's 10-year and 30-year government bond yields have reached multi-decade highs due to anticipated fiscal expansion and election-related tax cut promises, raising doubts about Japan's commitment to fiscal discipline. Similarly, Germany's 30-year bond yield surged to its highest level in nearly two years, reflecting broader European debt concerns. In the U.S., the 10-year Treasury yield remains elevated near 4.4%, pressuring equity valuations, especially in rate-sensitive sectors like high-beta tech and REITs. This environment is prompting investors to reassess sector exposures and hedging strategies as inflation fears and policy uncertainties persist. The global rise in bond yields is also influenced by increased government bond issuance to fund infrastructure and military spending, while traditional buyers reduce participation.