Japan's bond yields hit 30-year highs—here's why it matters

Business Jan 05, 2026

Japan's government bond yields just shot up to levels not seen since the late '90s, as the Bank of Japan hints at more interest rate hikes.
The yen is weak, making imports pricier and pushing up inflation.
For context: the 10-year yield hit 2.125% (highest since 1999), and the two-year reached 1.195% (not seen since 1996).

Why should you care?

These shifts mean borrowing could get costlier in Japan.
The BOJ recently nudged rates up but hasn't said what's next—leaving investors guessing.
Some experts, like Naoya Hasegawa, say rates might climb higher than expected, while others warn that these rapid changes make investing tricky.
To calm things down a bit, Japan is cutting back on issuing super-long bonds next year—a move to ease oversupply concerns.