Core Viewpoint - Concerns over global government fiscal sustainability are intensifying, leading to a renewed sell-off in long-term bonds, with yields surging across various countries [1][2]. Group 1: Global Bond Market Dynamics - The recent sell-off in long-term bonds mirrors the significant bond market turmoil experienced in May, driven by fears of government deficits across major economies including the US, UK, France, and Germany [1][2]. - The yield on 30-year US Treasury bonds has approached 5%, reflecting a cumulative increase of over 20 basis points since the beginning of the month, as investors react to rising inflation concerns and substantial future debt increases due to legislative measures [2][3]. - German long-term bond yields have reached their highest levels since 2011, with the 30-year yield rising to 3.25%, influenced by increased government spending and trade tensions with the US [3]. Group 2: Japan's Bond Market Situation - Japanese long-term bonds led the global market decline, with the 40-year bond yield jumping 17 basis points, and the 30-year yield nearing historical highs due to upcoming elections and potential fiscal policy changes [5][6]. - Japan's debt-to-GDP ratio has reached 250%, the highest among developed economies, with a significant portion of the budget allocated for debt repayment, totaling 28.2 trillion yen (approximately 191 billion USD) [5][6]. - The Bank of Japan's exit from negative interest rates and the reduction in bond purchases by traditional investors like life insurance companies have contributed to the volatility in the bond market [5][6]. Group 3: Implications for the Economy - Rising long-term bond yields in Japan are expected to increase corporate bond issuance costs, potentially leading to a reduction in domestic bond issuance or a shift towards overseas financing [6][7]. - Analysts express concerns that sustained increases in Japanese bond yields could negatively impact the stock market, particularly in the context of rising government spending and inflation [7]. - The correlation between US tech stock valuations and Japanese bond yields has been noted, suggesting that a significant rise in Japanese yields could tighten global liquidity and adversely affect US tech stocks reliant on low-cost funding [7].