Japanese government bond yields rose sharply on Monday as speculation intensified over a potential reduction in the national consumption tax on food, heightening concerns about fiscal discipline ahead of an anticipated general election. The 10-year JGB yield climbed to 1.18%, its highest level since mid-2023.
- 10-year Japanese government bond (JGB) yield rose to 1.18% on January 19, 2026
- The increase represents a 15-basis-point rise from the previous trading session
- Speculation centers on a proposed temporary reduction in the 10% consumption tax on food
- Market participants fear the tax cut could lead to a fiscal imbalance ahead of the general election
- Yields on 30-year JGBs also climbed, reaching 1.53% amid broader concerns over long-term debt sustainability
- The Bank of Japan’s current yield curve control policy remains in place but faces growing pressure
Japanese government bond prices declined significantly on Monday, with the 10-year yield rising to 1.18%, marking its highest point since June 2023. The move followed reports that senior policymakers within the ruling coalition are discussing a temporary cut in the 10% consumption tax applied to food items, a measure aimed at easing household inflationary pressures. The proposal, though not yet formalized, has sparked investor unease about future fiscal stability and the potential for increased deficits.