In Tokyo’s bond market on the 24th, the yield on newly issued 10-year Japanese government bonds surged to 3.065%, setting a new high since August 1996. Rising US interest rates spilled over into the market, while the yen’s depreciation was also a contributing factor.
In Tokyo’s bond market on the 24th, the yield on newly issued 10-year Japanese government bonds rose 0.080% from the previous day to 3.065%, reaching its highest level in about 30 years. The yield had risen to 3.055% in the morning, but selling intensified further in the afternoon. The yield was at its highest level since August 1996, renewing market focus on rising domestic interest rates.
The backdrop was movement in the US market. The yield on 10-year US Treasury bonds surged to 5.113% amid Federal Reserve officials’ supportive stance toward additional rate hikes and solid economic indicators, recording its highest one-day level since April 2025. The move is said to have spilled over into the Tokyo market.
The yen’s depreciation and expectations of additional Bank of Japan rate hikes are supporting the rise in domestic interest rates. Market participants believe that the widening interest-rate gap between Japan and the US is increasing pressure on the yen to weaken and contributing to selling of domestic bonds.
Higher long-term interest rates directly affect mortgage rates and corporate borrowing costs. The benchmark rate for fixed-rate mortgages may continue to trend upward, and higher rates are also expected to drive up the cost of issuing corporate bonds.