Japan's Bond Market in 18-Year Turmoil: Global Impact Feared Amid Spending & Rate Hike Worries

• Japan's 10-year government bond yield surged to 1.980%, its highest level in 18 years, indicating significant market turmoil.
• Concerns over record government spending (FY26 budget potentially exceeding 120 trillion yen) and anticipated Bank of Japan rate hikes are driving investor sell-offs.
• Investors are offloading long-term bonds ahead of the BOJ's policy meeting, fearing a hawkish stance and further interest rate increases.
• The 10-year bond yield is critical as it reflects both government fiscal health and central bank monetary policy signals.
• While gold may see short-term pressure, its long-term safe-haven appeal remains strong; India faces limited, controlled impact on bonds and rupee.

Why It Matters: Japan's bond market faces 18-year high yields due to spending and rate hike fears, with global ripples.