Japanese bond yields reached the 16-year maximum

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The 10-year borrowing costs of Japan rose to a 16-year high on Thursday, when Tokyo joined the global bond sale caused by Germany’s decision to spend more on defense.

The yield on the 10-year Japanese government bond has grown by 0.06 percentage to 1.5 percent, which has been since 2009.

Germany on Wednesday saw it The highest increase in borrowing costs over 28 years As his bonds sold after the historical transaction between political parties to spend hundreds of billions of euros on defense and infrastructure.

The increase in German bond yields is against the background of yield growth in other countries, including in the UK, on ​​the back of state plans to increase financial costs.

Asia traders said the move was strongly set up and it was difficult to determine who was behind the sale, in particular, because large banks and institutions are usually JGBs buyers in March ahead of the end of the Japanese financial year.

“This is a similar story around the world – a little infection of Germany,” said the fuss Kotec, a macro conductive at Barclays.

“Japan shift” after a stronger than expected, economic growth and increased inflation have also increased market expectations from a more elevant policy from the Japanese Bank, he added.

Over the past year, Boj has raised interest rates as it is trying to normalize the monetary policy after long-term ultra-low rates.

Thursday growth stems from the constant increase in JGB yield since the beginning of 2025 and comes when Japanese inflation continues to exceed the 2 percent target of the central bank.

The uncertainty circling around the prospect of Japan’s interest rate and JGB market were allocated to Japan’s deputy governor of Japan, Schinini, on Wednesday.

In a speech, affected by the current state of the world economy, he decided to reinforced geopolitical tension, both of the factors that can “affect both economic activities and prices in the US, such as the new administration.”

Some traders began to argue that Boj would increase interest rates at the next meeting later in March. However, most economists continue to predict the next increase in July.

The yen was stable over Tokyo on Thursday morning, hesitating approximately 149.2 against the US dollar. Japanese shares grew in the morning and Broadix Benchmark rose 1.2 percent.

Shares of the two largest protection manufacturers in Japan – Mitsubishi Heavy and Kawasaki Heavy, grew by 10 percent and 9.8 percent respective Japan even more to increase its military expenses.