Japan Debt Bomb (2025-2026)
Japan’s Bond Market Shock: Understanding the Global Fault Line and What It Means for Indian Investors For decades, Japan has been the quiet giant of global finance; heavily indebted, structurally stagnant, yet strangely stable. Its bond market, the world’s second largest, has operated for years under an unconventional regime of yield suppression, monetary experimentation, and near-zero interest rates. In the background of global economic narratives dominated by the United States, China, and Europe, Japan has often been viewed as a steady but unexciting participant in the global financial system. But that perception is beginning to shift. Today, Japan’s long-term government bond yields are rising sharply, the yen is under sustained pressure, and the Bank of Japan (BoJ) finds itself boxed into a policy corner with fewer escape routes than ever before. What appears at first glance to be a domestic Japanese issue may, in fact, be one of the most consequential global financial risks of the ...
