Major bond markets were rattled by Japan’s borrowing costs rising to record highs on Tuesday as Greenland tensions raised concerns about fiscal spending and debt.
As investors prepare for higher government expenditure, 10-year Japanese government bond yields rose roughly 19 basis points (bps) in two days, the largest spike since 2022, while 30-year yields rose the most since 2003 on Tuesday.

Prime Minister Sanae Takaichi called an emergency election on Monday and is campaigning on stimulus.

“If there is a strong mandate after the election, that could open the door to more fiscal spending,” said Principal Asset Management chief global strategist Seema Shah.

“It pulls a lot of global bond markets into a difficult story about debt and you can see that in the rise in borrowing costs.”
Bond investors were particularly concerned about U.S. President Donald Trump’s tariff threats on European partners over Greenland, which may force Europe to issue more bonds to increase defense expenditure.
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