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Japan benchmark bond yield hits 30-year high on inflation, fiscal health concerns
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Japan benchmark bond yield hits 30-year high on inflation, fiscal health concerns
Jul 8, 2026 6:01 PM

TOKYO, July 9 (Reuters) - The benchmark 10-year Japanese

Government Bond (JGB) yield hit a 30-year high on Thursday, as

rising oil prices rekindled inflation concerns and investors

remained wary of Japan's fiscal health.

Here are a few details:

* The 10-year JGB yield rose 1.5 basis points

(bps) to 2.880%, the highest since September 1996. Yields move

inversely to bond prices.

* The two-year yield, the one most sensitive

to Bank of Japan policy rates, increased 1 bp to 1.44%. The

five-year yield also rose 1 bp to 1.995%.

* Oil prices jumped after U.S. President Donald Trump said

he thought a tentative deal to end the war with Iran was over,

pushing U.S. Treasury yields to a multi-week high.

* The finance ministry is set to auction about 2.5 trillion

yen ($15.38 billion) of 5-year notes later in the day. Higher

yields and signs of demand, reflected in a sharp narrowing in

the negative 5-year swap spread since late last month, should

support the sale, said Lisa Mochizuki, analyst at SMBC Nikko

Securities.

* JGB yields have risen since the government outlined large

spending plans in the policy blueprint last month. The blueprint

called on the Bank of Japan to align monetary policy with growth

efforts, fuelling ​concerns the government could pressure the

BOJ to keep interest rates low and risk falling behind the curve

as inflationary pressures build.

* The Japanese government is considering revising language

on monetary policy in the economic ‌blueprint, a draft obtained

by Reuters showed.

* "In the recent JGB market, yields have been rising on

fiscal factors, but one of the biggest problems with fiscal

expansion is that it increases inflation risks," said Ataru

​Okumura, chief rate strategist at SMBC Nikko Securities, in a

note.

($1 = 162.5500 yen)

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