Japanese government bond yields reached a new 15-year high on Tuesday, climbing to 1.40% as strong economic growth data fueled expectations of further monetary tightening by the Bank of Japan.
What Happened: Prominent economist and gold advocate Peter Schiff warned of potential market disruption, stating on X, “The yield on the 10-year JGB is now 1.38%, a new 15-year high. This slow-motion train wreck doesn’t seem to be on anyone’s radar… My guess is 2% does the trick.”
Japan’s economy expanded by 0.7% in the fourth quarter, exceeding the forecast of 0.3% and accelerating from 0.4% in the previous quarter. On an annualized basis, GDP grew 2.8%, building on the third quarter’s 1.7% growth.
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Why It Matters: The surge in yields carries implications for U.S. investors, as Japan’s shift away from ultra-loose monetary policy could trigger a reallocation of global capital flows. In March, the BOJ raised its benchmark interest rate to 0–0.1%, ending a 17-year period of negative interest rates.
This policy change has led to increased Japanese bond yields and a stronger yen, prompting Japanese investors to repatriate capital from foreign markets.
The economic momentum has sparked a boom in Japan’s corporate bond market, with companies rushing to secure funding before anticipated rate hikes. Japanese firms have issued a record 14.7 trillion yen ($96.8 billion) in local-currency bonds this fiscal year, according to Bloomberg data.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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