THE RISE OF THE YEN THREATENS THE NIKKEI 3/3

A marked steepening at the long end of the Japanese government bond yield curve pushed 10-year yields above 2.9% in August 2026. This upward shift was accelerated by persistent Q2 inflation, yen volatility, and the Bank of Japan's planned reduction in monthly debt purchases. The gradual withdrawal of the central bank as the primary public debt buyer has unanchored market volatility and raised long-term borrowing costs. Institutional buyers are demanding higher term premiums to absorb sovereign issuances amid ongoing fiscal support. Consequently, 10-year yields are projected to stabilize between 3.0% and 3.5% by the end of 2026.