Breaking News！！！！ The 10-year Japanese government bond (JGB) yield soars by 12.5%——a “gray rhino” warning alarm for the global bond market has sounded, and this is no joke!!!

The market is directly sending a message: Little Japan, you need to repay your borrowed money at the new rates. 😂

On January 20, 2026, the yield on Japan’s 10-year government bonds (JGB) surged over 12.5 intraday, reaching around 2.30%, hitting a new high since 1999.
First of all, this is not an isolated event but a “triple resonance” driven by Trump’s tariff threats + Japan’s fiscal expansion expectations + the gradual tightening by the Bank of Japan.

Japan is a very important bondholder in the global market. Over the past 20 years, Japan’s bond yields have been around 1% or even negative, but the Bank of Japan has been printing money frantically, flowing funds into foreign industries and investing in global assets. Now that Japanese bond yields are so high, capital inflows are inevitable, and the global market will lose a major long-term buyer who has been purchasing continuously for years, leading to downward pressure on prices.

Based on my cross-verification of major news sources, the core driving factors of this event are as follows:
1- Japan’s domestic fiscal “bomb” — expected expansion policies by Sanae Takaichi
Japan’s Prime Minister Sanae Takaichi is pushing for large-scale fiscal stimulus, including promises to cut or suspend the sales tax on food (from 8% to 0%) to cope with rising prices, coupled with the recent announcement of dissolving the House of Representatives for early elections (to consolidate power).
This will significantly worsen the fiscal deficit (debt/GDP exceeding 250%), and the bond market will have “no buyers to take over.”
- There are reports that: Japanese insurance companies sold over 822.4 billion yen worth of bonds with maturities over 10 years in December (the largest since 2004).

2- Global tariff turmoil compounded — Trump’s “tariff nuclear bomb”
Trump threatened to impose tariffs on Europe (even using Greenland as leverage), causing market fears of expanding US fiscal deficits + weakening Federal Reserve independence (Rick Reeder may take over as Chair). Long-term US Treasuries are being sold off simultaneously (10Y/30Y +3bp+), and the safe-haven attribute of the USD/US debt weakens.
- Japanese investors (major holders of US debt globally) hedge exchange rate risks, causing US debt attractiveness to collapse → capital flows back to Japan, further pushing up JGB yields.
- European/Australian/New bond markets follow suit, exposing vulnerabilities in the global long-end curve.

3- Gradual normalization by the Bank of Japan
The Bank of Japan (BOJ) has ended negative interest rates + Yield Curve Control (YCC), with multiple rate hikes planned for 2025, bringing the policy rate to around 0.75%. Although short-term, the market is pricing in the next rate hike (possibly in July), coupled with a slowdown but not cessation of QT (balance sheet reduction), increasing bond supply pressure. Ueda Kazuo reiterated that “if economic prices meet expectations, rate hikes can happen at any time,” but fiscal risks make the market more panicked.

So, what does this mean for our crypto circle or financial markets?

First, US Treasuries and the global bond market: Japanese capital inflows will amplify US bond sell-offs, with the 10Y US Treasury possibly rising passively, increasing borrowing costs and suppressing US stocks. (Bearish)
The stock market will face a “double kill” risk from Japanese equities and bonds, affecting global financial market stability.
As for the crypto space, declining safe-haven demand + tightening liquidity may put short-term pressure on assets like BTC, but if viewed as “anti-fragile” assets, they could benefit in the long run from “decentralized safe-havens.” Our focus should be on monitoring the impact of Japanese capital inflows on BTC (historical correlation: when JGB yields rise, BTC sometimes shows negative correlation).