Japan’s JGB jolt

Japan has provided one of the first global financial flashpoints of 2026. Prime Minister Sanae Takaichi’s move to dissolve the lower house and call a snap election sent Japanese government bond (JGB) yields to record highs, affecting global bond and currency markets. The market reacted to fiscal concerns over the prospect of increased debt issuance to fund Takaichi’s campaign pledges. The recent volatility in Japanese government bonds was mainly in the less‑liquid 20-40‑year sectors, which made the moves look bigger compared to actual fundamentals. Evidence suggests this isn’t a systemic bond‑market...