🇯🇵 Japan's 2-year government bond yield rises to 1.315%, reaching the highest level in nearly 30 years.

The 2-year government bond yield is at its highest in decades. The 10-year government bond yield exceeds 2.3%. The 30-year government bond yield is 3.55%.
As a background, Japan has kept interest rates near zero for 30 years. An entire generation of Japanese investors has never experienced a normal interest rate environment.
This is why the impact of this situation is not limited to Japan.
Japanese institutions are the world's largest foreign holders of U.S. Treasuries and European bonds. Over the past 30 years, they bought foreign bonds because domestic bond yields were almost zero. Now, with Japanese bond yields being high, everything has changed.
Since Japanese bonds now offer a 2.3% yield domestically with no exchange rate risk, why invest in U.S. Treasuries with a 4.2% yield?
Even if Japanese funds partially flow back into Japan, it will push up yields in the U.S., Europe, and Australia. This means that, without any central bank taking action, the global financial environment will tighten.
The Bank of Japan's rate hike plans are not over yet. One member has voted in favor of rate hikes in two consecutive meetings. The governor indicated that further rate hikes may be possible in the future.
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