Japan’s bond selloff is a warning to the world

[Pelican Press 0]

This is the hidden content, please

• Sign In
• or
• Sign Up

Japan’s bond selloff is a warning to the world

Photo: Julian Finney (Getty Images)

Demand for Japan’s 40-year government bonds plunged Wednesday to its lowest level since last July, reinforcing fears that appetite for ultra-long Japanese debt is evaporating.

The

This is the hidden content, please

• Sign In
• or
• Sign Up

followed a similarly

This is the hidden content, please

• Sign In
• or
• Sign Up

— the worst since 2012 — and comes after a month of heavy selling across Japan’s “super-long” bond market.

Together, the flops suggest that confidence in long-dated Japanese government bonds is breaking down, despite an emergency signal from Japan’s Ministry of Finance that

This is the hidden content, please

• Sign In
• or
• Sign Up

to calm the market. And briefly, the announcement did soothe rattled investors across the globe, helping to push down yields across Asia, the ***, and the U.S.

Analysts now say Japan’s shift toward issuing bonds with shorter maturities could become a global test case for how governments manage growing fiscal stress. But if Wednesday’s auction is any indication,

This is the hidden content, please

• Sign In
• or
• Sign Up

because demand for long-end debt is still deteriorating. And while it may be less consequential, a storm of chatter on X and

This is the hidden content, please

• Sign In
• or
• Sign Up

(

This is the hidden content, please

• Sign In
• or
• Sign Up

) — where armchair analysts warn of a

This is the hidden content, please

• Sign In
• or
• Sign Up

— suggests concerns are resonating far beyond institutional desks.

Here’s a quick explainer.

Japan’s 30- and 40-year bond yields have recently soared to record highs (3.2% and 3.5%, respectively) after years of being stuck near zero. It’s a

This is the hidden content, please

• Sign In
• or
• Sign Up

for a country where the

This is the hidden content, please

• Sign In
• or
• Sign Up

, per the Bank of Japan, is around 0.5%. Auctions are failing, with long-dated debt buyers stepping aside even as supply remains strong.

What’s more,

This is the hidden content, please

• Sign In
• or
• Sign Up

. Four major Japanese life insurers reported $60 billion in paper losses last quarter, quadruple last year’s total. Nippon Life alone saw $25 billion in unrealized losses.

With

This is the hidden content, please

• Sign In
• or
• Sign Up

and the Bank of Japan already owning more than half of outstanding Japanese government bonds, the country’s leadershop boxed in. The BOJ is no longer stepping in to buy more.

This is the hidden content, please

• Sign In
• or
• Sign Up

while real wages are down and

This is the hidden content, please

• Sign In
• or
• Sign Up

. That leaves Japan trapped between raising rates and risking recession, or holding steady and letting inflation and yields run even hotter.

Like Japan, the U.S. is flooding the market with long-term debt at just the moment buyers are growing fatigued and wary. Last week, low-demand Treasury auctions and a Trump-backed, deficit-swelling tax bill

This is the hidden content, please

• Sign In
• or
• Sign Up

.

Story Continues

While yields have since dipped, the ******* problem of too much supply and not enough demand remains. And if Japan can’t sustain confidence even after decades of ultra-loose policy, it raises urgent questions about how other governments plan to survive their own reckoning.

For the latest news,

This is the hidden content, please

• Sign In
• or
• Sign Up

,

This is the hidden content, please

• Sign In
• or
• Sign Up

and

This is the hidden content, please

• Sign In
• or
• Sign Up

.

This is the hidden content, please

• Sign In
• or
• Sign Up

#Japans #bond #selloff #warning #world

This is the hidden content, please

• Sign In
• or
• Sign Up

This is the hidden content, please

• Sign In
• or
• Sign Up