The yield on Japan's 30-year government bond surged by 30 basis points in a single trading session, reaching an unprecedented 3.90%—the highest level in the nation's history. This sharp move was part of a broader sell-off across the bond curve. The 40-year bond yield also climbed 28 basis points to a record 4.22%, while the 10-year yield rose to 2.37%, a level not seen since the 1990s.
The spike in yields, which move inversely to bond prices, signals rapidly falling demand and growing investor fear. Analysts point to new political promises of tax cuts ahead of Japan's February elections as a key catalyst. Investors are concerned that reduced tax revenue could force the government to take on even more debt, adding strain to a financial system already under pressure. Japan's government debt is among the highest globally, exceeding 250% of its GDP.
This type of financial stress and market panic often leads investors to sell risk assets to raise cash, which historically includes cryptocurrencies. The article draws a parallel to last year when Japan raised interest rates, leading to a sharp decline in crypto markets, with Bitcoin falling to near $74,000. While such events can trigger initial price drops in Bitcoin and altcoins, the analysis notes that gold and silver are currently hitting new all-time highs, and Bitcoin has often followed precious metals higher after the initial shock subsides.
