Japan Bond Turmoil Increases Global Yield Pressure

On January 21, Japan’s bond market experienced a dramatic sell-off, with 30-year and 40-year yields surging over 25 basis points following Prime Minister Kaneshiro Mana’s fiscal policy changes.

The tumult, reminiscent of prior economic crises, highlights global investor unease and raises concerns about Japan’s financial stability, particularly affecting international bonds and equity markets.

Key Points:

Bitcoin (BTC) exhibited a mixed reaction amid traditional financial turmoil. Reporting a price of $88,770.24 and a market cap of $1.77 trillion, the cryptocurrency faced a 4.13% decline over 24 hours and a 6.80% dip over the last week, according to CoinMarketCap. Trading volumes rose sharply, marking a 64.10% increase in 24-hour activity, reflecting heightened investor activity amidst broader market volatility.

Insights from Coincu’s research highlight that Japan’s policy shift could trigger long-term volatility in global markets. Increased spending amid high debt ratios tends to increase borrowing costs, which can suppress equity gains globally.

“The prospect of a win for Takaichi, who has promised an expansionary fiscal policy when the Japanese debt to GDP ratio is already nearly 250%, is causing a major upset in the Japanese bond market.”

This highlights the significant impact that fiscal policies can have not only domestically but also on a global scale.

Bitcoin and Equity Markets Respond to Yield Turmoil

Did you know? The Japanese debt to GDP ratio is nearly 250%, one of the highest in the world.

Bitcoin (BTC) exhibited a mixed reaction amid traditional financial turmoil, reporting a price of $88,770.24 and a market cap of $1.77 trillion.

This highlights the significant impact that fiscal policies can have not only domestically but also on a global scale.