‘Major global stress point’: Sanjeev Sanyal warns as Japan’s 30-year yield hits record high

Japan’s long-term borrowing costs surged to historic levels intensifying concerns over the country’s fiscal stability, currency weakness and the global bond market’s mounting stress. 

Sharing a chart of the Japan 30-year yield on X (formally twitter), economist and member of the Prime Minister’s Economic Advisory Council Sanjeev Sanyal warned that the spike marks a critical inflection point for global markets. “Japan 30-year yield hits 3.4% — this is a major global stress point. Given its debt levels, Japan will either have to accept recession or a sustained period of high inflation. Meanwhile UK 30-year is at 5.4%,” he wrote. 

Yields surge to multi-decade & record highs 

Japanese government bonds (JGBs) extended their sell-off, pushing 30-year yields to a record 3.37%, up 3 basis points — the highest ever recorded. Other maturities followed the same pressure: 

• 20-year yield: Jumped 3.5 bps to 2.85%, highest since June 1999 
• 10-year yield: Climbed 3.5 bps to 1.8%, a level last seen in June 2008 

The sharp move reflects a confluence of risks: Japan’s massive debt, persistent inflation pressures, and the rapid weakening of the yen. 

Stimulus package fuels debt concerns 

The spike in yields comes just days after Prime Minister Sanae Takaichi’s cabinet approved a 21.3 trillion yen ($135 billion) stimulus package aimed at helping households and businesses cope with rising prices. The package includes energy subsidies and tax cuts. 

Takaichi, Japan’s fifth prime minister in five years, came to power last month vowing to tackle inflation — a key factor behind the political downfall of her predecessor, Shigeru Ishiba. 

But while the stimulus may provide short-term relief, markets fear it worsens Japan’s debt burden — already the highest among advanced economies — exacerbating the sell-off in government bonds and weakening the yen further. 

Yen under pressure 

A sliding yen is pushing up import costs for Japan, which depends heavily on foreign food, fuel, and raw materials. 

Finance Minister Satsuki Katayama hinted strongly at the possibility of intervention, saying the government “will take appropriate action against disorderly FX moves.” Such remarks typically preface currency market intervention. 

UK yields also at multi-decade high 

Japan’s turmoil comes as long-term borrowing costs rise sharply across major economies. 

British 30-year gilt yields recently hit 5.680%, a 27-year high, driven by concerns over: 

• the UK’s stubbornly high inflation 
• elevated government borrowing 
• sluggish economic growth 
• political uncertainty triggered by US President Donald Trump’s pressure on the Federal Reserve 

The UK now has the highest long-term borrowing costs in the G7, a fact Sanyal highlighted as part of his broader warning about global bond stress. 

Japan’s yield spike is particularly significant because the country has long been the world’s anchor of ultra-low interest rates. Rising JGB yields could ripple across global markets, raising financing costs and amplifying volatility. 

Sanyal’s assessment underscores the scale of the moment: the world may be entering a phase where the most indebted nations face a painful choice — recession or prolonged inflation — as borrowing costs rise relentlessly.