Japan's 10-year treasury bond yield hit 3% for the first time in this century. This is an important milestone for a bond market where the cost of a benchmark borrowing has been close to zero for many years and is now gradually returning to normal. On Tuesday, the yield rose 6 basis points to 3%, the highest level since 1996. In the same period last year, the yield was only half of what it is now, highlighting the rapid pace of change, which is having a ripple effect on the Japanese economy and global financial markets. Since the Bank of Japan ended the last negative interest rate policy in the world in 2024, the dynamics of the country's bond market have changed dramatically. Prices used to be dominated by the Bank of Japan, but now they are determined to a greater extent by domestic and foreign investors. Compared to the Bank of Japan's policy, they make trading decisions based on inflation and economic growth prospects, as well as the risk and return of Japanese treasury bonds compared to other assets.

Japan's 10-year treasury bond yield hit 3% for the first time in this century. This is an important milestone for a bond market where the cost of a benchmark borrowing has been close to zero for many years and is now gradually returning to normal. On Tuesday, the yield rose 6 basis points to 3%, the highest level since 1996. In the same period last year, the yield was only half of what it is now, highlighting the rapid pace of change, which is having a ripple effect on the Japanese economy and global financial markets. Since the Bank of Japan ended the last negative interest rate policy in the world in 2024, the dynamics of the country's bond market have changed dramatically. Prices used to be dominated by the Bank of Japan, but now they are determined to a greater extent by domestic and foreign investors. Compared to the Bank of Japan's policy, they make trading decisions based on inflation and economic growth prospects, as well as the risk and return of Japanese treasury bonds compared to other assets.