Key facts
- The coupon rate on benchmark Japanese government bonds has topped 3% for the first time in three decades.
- Japan's 10-year government bond yield rose to 3.11% on October 6, 2026.
- The yield is 1.43 points higher than a year ago.
- Prime Minister Sanae Takaichi pledged fiscal expansion, including a consumption tax cut on food, without issuing new bonds.
- Minutes from the Bank of Japan's September meeting showed policymakers emphasizing inflation containment above the 2% target.
The coupon rate on benchmark Japanese government bonds has surpassed 3% for the first time in three decades, as yields continue to climb in the secondary market amid global concerns over government debt and inflation. The yield on Japan's 10-year government bond rose to approximately 3.11% on October 6, 2026, marking a slight increase from the previous session and remaining near a 30-year high.
Despite a smooth latest bond auction, investors remain uneasy about inflation, partly due to the protracted conflict in the Middle East and concerns about Japan's fiscal trajectory. Prime Minister Sanae Takaichi, speaking to parliament, pledged fiscal expansion, including a consumption tax cut on food and promotion of domestic investment, while assuring markets that these measures would be funded without issuing new bonds.
Markets are also awaiting a series of economic indicators this week, including August figures for wages, the current account, and household spending, as well as September data on consumer confidence and machine tool orders. Minutes from the Bank of Japan’s September meeting revealed that policymakers are placing greater emphasis on containing inflation above the central bank’s 2% target, keeping expectations for another rate hike this year alive, though officials provided limited guidance on the timing.