In October 2026, the yield on French 10-year government bonds exceeded 5% as credit concerns surrounding an emerging data center operator coincided with political uncertainty in France. The rise in long-term yields reflects competition for capital, while market attention is also turning to the outlook for the yen exchange rate.
In October 2026, two major shifts occurred simultaneously in global financial markets. One was the emergence of credit concerns surrounding an emerging data center operator, and the other was the rise in French government bond yields. Yields on French long-term government bonds rose above 5%, reaching levels not seen since 2002.
The “scramble for capital,” cited in the previous installment as a factor behind the rise in long-term yields, is also thought to be influencing the latest increase. The addition of political uncertainty specific to France suggests that credit concerns and rising yields may be interacting with each other.
This situation is affecting not only the bond market but also the stock market, and as capital flows become more dispersed, attention is also turning to movements in the yen exchange rate. Depending on developments from here, market risk aversion could intensify.
As financial developments in France become intertwined with interest-rate trends in Europe and the United States, attention is focused on the outlook for political developments and default risk. The market remains watchful of the effects of long-term interest rates and external shocks.