Japan is sailing dangerously close to the wind. The most indebted state in the world is taunting markets with one of the least justifiable plans for extra debt issuance.<\/p>\n\n\n\n
The fiscal irresponsibility is perhaps no worse than in America, France or Labour\u2019s welfare Britain, but right now it is Japan that is in the sights of the bond vigilantes.<\/p>\n\n\n\n
Yields on Japanese debt<\/a> have spiked wildly across the maturity curve since Sanae Takaichi<\/a> took power six weeks ago and shocked investors with a \u201clow quality\u201d fiscal expansion of $135bn (\u00a3101bn), including such gems as rice vouchers and subsidies for fossil fuels \u2013 ploys to mask the inflationary consequences of her own policies.<\/p>\n\n\n\n The scale of this populist misadventure is sending tremors through the international financial system, as well as horrifying the economic establishment in Tokyo.<\/p>\n\n\n\n The benchmark 10-year bond yield jumped to 1.94pc in intraday trading in Tokyo, up from 1.79pc a week ago and a whisker shy of highs last seen in 1997. The speed of the move in the once-glacial $12tn market for Japanese public and private debt is almost frightening.<\/p>\n\n\n\n Read it all<\/a>.<\/p> Japan\u2019s false Thatcher is blowing up a $12tn bond market https:\/\/t.co\/gLGSs085PM<\/a><\/p>— B2Investor (@B2Investor) December 5, 2025<\/a><\/blockquote>