#JapanBondMarketSell-Off Global Ripples from Tokyo

The recent sharp sell-off in Japan’s bond market is sending shockwaves across global financial markets. Yesterday, Japanese government bonds (JGBs), especially long-term maturities, experienced record-high selling. The 40-year bond yield exceeded 4% for the first time, marking its highest level since 2007, while the 30- and 20-year yields jumped by more than 25 basis points.
This sell-off is primarily driven by Prime Minister Sanae Takaichi’s promise to suspend the food consumption tax for two years, combined with rising concerns over increased borrowing amid expansionary fiscal policies. With a snap election scheduled for February 8, markets are signaling that Japan’s enormous debt burden — approximately 250% of GDP — is reaching its limits for accommodating additional fiscal measures.
In the last 24 hours, the market has seen a slight recovery. After Finance Minister Satsuki Katayama called for “market calm”, the 40-year yield fell by 11–22 basis points. Yet the global effects are already evident: US 30-year Treasury yields tested around 4.9%, while yields in the UK and Canada also experienced upward pressure.
This scenario acts as a “bond vigilante” warning for highly indebted countries: markets can respond swiftly if fiscal discipline is perceived as weakening. For investors, rising volatility highlights the potential flight to safe-haven assets, such as gold and crypto, as capital seeks protection against uncertainty.
The critical question now is: Will this movement in Japan push global interest rates higher, or will intervention by the Bank of Japan stabilize yields? The answer will shape both global bond markets and broader risk sentiment in equities and digital assets.
At Gate.io, we continue to monitor such macro events closely, as global interest rate shifts increasingly influence cross-asset strategies, safe-haven flows, and trading opportunities.