Japan’s 10-year government bond yield reached 3% on September 1, its highest level since 1996, after earlier edging higher as rising oil prices lifted inflation concerns and expectations for faster Bank of Japan (BOJ) rate increases. The yield has risen more than 1.4 percentage points since August 2025, nearly doubling from around 1.6% when Prime Minister Sanae Takaichi took office in October 2025. Oil prices above $85 per barrel, Japan’s reliance on imported energy, the BOJ’s policy-rate increase to 1% in June 2026 and reduced Japanese government bond purchases have contributed to the repricing. J.P. Morgan’s Japan Markets Research said a September BOJ rate increase still appeared likely, while USD/JPY developments remained central to expectations for future moves. Record budget requests of approximately 143 trillion yen, or about $890 billion, under Takaichi have added fiscal pressure, while higher Japanese yields could affect global bond markets because Japanese investors hold substantial amounts of foreign debt.