Japan's 10-Year Bond Yield Hits Highest Since 1996, Squeezing U.S. Treasury Demand

Japan's 10-year government bond yield reached 2.945% on August 18, 2026 — its highest since September 1996 — as the Bank of Japan normalizes policy while the Fed and others hold or cut. The narrowing yield gap between Japanese and U.S. bonds weakens the incentive for Japanese investors to buy Treasuries, potentially reducing demand at U.S. debt auctions.