Three G7 bond markets worth watching right now: France, Japan, UK.
Japan's the interesting one. 10-year JGB yields are pushing 3.10% — highest in 30 years — yet the yen keeps weakening. That's not normal.
Why it matters: Japan has been one of the biggest buyers of US Treasuries for decades. If their own bond market is under stress and yields keep climbing, they'll need to keep more capital at home. That means less demand for USTs.
Bond market stress doesn't stay local. What happens in Tokyo doesn't stay in Tokyo. If Japan steps back as a buyer, US yields feel it. And if US yields move, everything else reprices.
This isn't a crisis yet. But it's a structural shift that's been building quietly. The longer JGB yields stay elevated and the yen stays weak, the more pressure builds on the entire global rates complex.
Watch Japan.
Japan's the interesting one. 10-year JGB yields are pushing 3.10% — highest in 30 years — yet the yen keeps weakening. That's not normal.
Why it matters: Japan has been one of the biggest buyers of US Treasuries for decades. If their own bond market is under stress and yields keep climbing, they'll need to keep more capital at home. That means less demand for USTs.
Bond market stress doesn't stay local. What happens in Tokyo doesn't stay in Tokyo. If Japan steps back as a buyer, US yields feel it. And if US yields move, everything else reprices.
This isn't a crisis yet. But it's a structural shift that's been building quietly. The longer JGB yields stay elevated and the yen stays weak, the more pressure builds on the entire global rates complex.
Watch Japan.
