Explainer

Why Investors Are Worried About Japan’s Bond Market

Pedestrians in the Ginza district of Tokyo, Japan, on Friday, April 4, 2025.Source: Bloomberg

Months of uncharacteristic volatility in Japan’s $7.6 trillion bond market has investors — who have become accustomed to uneventful trading — well and truly spooked.

An auction of 40-year Japanese government bonds on July 23 recorded its weakest demand since 2011 amid concerns over government spending and following news of a US-Japan trade deal.