Introduction
Japanese bonds (JGBs) are considered one of the most important fixed income instruments in the world, as they mirror the monetary policies of the Bank of Japan (BOJ). Recent movements have raised concerns among international investors, as any minor change in yields can lead to waves of declines or rises in global markets, from stocks to cryptocurrencies (Bank of Japan official reports).
Current situation
Japanese interest rates are close to zero or negative, making bond yields limited compared to US and European Treasury bonds.
Yield on 10-year JGB bonds: ~0.5% (Bloomberg market data)
US Treasury yield for 10 years: 3.8% (Bloomberg market data)
Reason for the sudden rise in yields
Since the Bank of Japan started reconsidering its 'zero interest' policies and bond purchase programs, concerns have emerged about injecting liquidity without a clear plan, raising Japanese bond yields due to potential risks (ainvest.com).
10-year bonds exceeded 2.34%
30-year bonds reached 3.88%
40-year bonds reached 4.24% (ainvest.com)
Political fear regarding government spending management and massive debts (~230% of GDP) increased pressure on bonds (aljazeera.net).
Impact on global markets
Stocks
The rise in bond yields increases financing costs for companies and pressures stocks (ig.com).
Currencies
Yen fluctuations against the dollar reflected in wide buying and selling waves, with risks of potential intervention (reuters.com).
Crypto
The rise in bond yields has led to a contraction in global liquidity, limiting flows to high-risk assets like BTC and ETH (ainvest.com).
Short- and medium-term forecasts
In the positive scenario, if Japanese bonds stabilize and global liquidity remains without additional shocks, global stock markets are expected to move steadily, while the yen remains relatively stable, and Bitcoin and Ethereum continue to recover without significant pressures.
In the negative scenario, if political and financial fears in Japan continue and bond yields rise sharply, we may witness a temporary decline in global markets, with the yen rising as a safe haven, while cryptocurrencies like BTC and ETH face downward pressure of up to 5–10% in the early days.
Summary
The rise in bond yields reflects broader financial risks.
Liquidity is shifting towards more conservative assets.
Crypto prices react to shifts in global financing.