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#JapanYield29YearHigh: 2.59%. The Last Time This Happened, Asia Was in Financial Crisis. Japan's 10-year government bond yield hit 2.59% this week — its highest level since May 1997. The 5-year yield hit an all-time record at 1.925%. The 30-year yield climbed to 3.81%. Every part of Japan's yield curve is moving in the same direction at once. The trigger this time is a hawkish Bank of Japan. The Summary of Opinions from April's policy meeting showed policymakers openly discussing rate hikes as early as the next meeting. One member said the BOJ should tighten unless clear signs of economic weakness emerge. Surging oil prices from the Iran conflict are pushing Japan's inflation closer to the 2% target it spent decades unable to reach — now that target is a ceiling, not a goal. The timing of US Treasury Secretary Bessent's visit to Tokyo added pressure. Markets were on guard that he might push Japan to hike rates faster to strengthen the yen, or take direct action to slow the JGB selloff. Japan's total government debt just hit a record $8.54 trillion — 10th consecutive year of record highs. Rising yields on that debt pile is not a theoretical problem. The global read-through matters. Japanese institutional investors — pension funds, life insurers, the postal bank — hold trillions in foreign assets. When domestic yields become attractive enough, that money comes home. The "carry trade unwind" that briefly crashed global markets in August 2024 was a preview. Japan at 2.59% is starting to become competitive with assets that required taking on currency risk to access. The OECD projects the BOJ's policy rate could reach 2% by end-2027. At the current pace, that timeline is looking conservative. #JapanYield29YearHigh