Japanese bond yields hit highest level since 1994

Business Dec 30, 2025

Japan's government bond yields just made their biggest jump in 31 years, with the 10-year yield reaching 2.075%—a level not seen since the late '90s.
This means Japan will pay more to borrow money, and global investors in bonds or yen assets could feel the impact too.

What's behind this spike?

The Bank of Japan recently raised its key interest rate to a 30-year high (0.75%) and cut back on buying bonds, all to tackle stubborn inflation.
On top of that, a big government spending plan is pushing yields even higher.
Some experts think another rate hike could come as soon as next year if the yen stays weak—Mizuho economist Yusuke Matsuo even said "currency defense could become a de facto priority."