Japan's bond market is facing serious challenges as yields hit record levels, causing significant losses and investor concern.
Sharp Rise in Bond Yields
In March 2025, the yield on 30-year Japanese bonds reached 3.20%, marking a record level. Since 2019, these bonds have lost 45% of their value, indicating serious issues in managing the country's debt.
Losses of Major Insurers
Japan's four largest insurers reported their losses on government bonds increased from $15 billion to $60 billion in Q1 2025. These figures represent a fourfold increase within a year.
Consequences for Global Markets
Problems in the Japanese bond market are starting to affect global financial markets. The yield on 10-year U.S. bonds has risen nearly 500% since 2020, which has also reflected in other countries.
The crisis in the Japanese bond market serves as a warning to other economies about the risks of excessive debt burdens. Investors are increasingly turning to assets like gold and cryptocurrencies amidst growing uncertainty.
