Japan Bond Yields Rise to Records Amid Snap Election and Tax Cut Concerns

Japanese government bond yields surged to record highs following Prime Minister Sanae Takaichi's announcement of a snap election on February 8, 2026, and her pledge to cut consumption taxes on food for two years. This raised concerns about Japan's fiscal health and increased government borrowing, leading to a sell-off in bonds, a decline in Tokyo stocks, and a weaker yen. Market participants expressed caution amid uncertainty over tax cut financing and potential impacts on global markets.