Japan's Bond Market Braces for Massive Supply Shock, Yields Soar

• Japan's government bond market faces an 8% rise in net supply to ¥65 trillion ($415 billion) this fiscal year, the largest increase in over a decade.
• The Bank of Japan's reduced bond purchases are a major driver, with monthly gross purchases cut by over a quarter.
• Japanese bonds were the worst performers among major sovereign markets last year, losing over 6% excluding currency effects.
• The benchmark 10-year bond yield climbed to 2.13%, its highest since 1999, with strategists predicting further increases.
• Prime Minister Sanae Takaichi's government faces rising interest payments due to a record budget and ambitious stimulus package.

Why It Matters: Japan's bond market faces unprecedented supply pressure and rising yields, challenging government finances.