Japanese government bond market turns ‘battlefield’ again

For two decades the market for Japanese government bonds lay dormant under the Bank of Japan’s regime of near-zero rates, with yields largely flatlining and entire days passing without a single benchmark bond changing hands. That changed last month after Prime Minister Sanae Takaichi’s vow to cut taxes sent yields surging; the 30-year bond jumped by more than a quarter percentage point in a single session, and U.S.

Treasury secretary Scott Bessent rang counterparts in Tokyo as global markets were rattled. The moves have revived fears that rising interest costs could shove Japan into a damaging ‘debt trap,’ consuming more of the budget and forcing yet more borrowing. At the same time, the volatility has brought veteran J.G.B.

traders back into demand, with a rare cohort of strategists in their 60s and older finding their expertise suddenly prized. ‘It’s becoming a ‘battlefield’ again,’ said Hiroyuki Kubota, who began dealing the bonds in 1986.

Japan, Tokyo

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