Japanese Shares Drop on Surging Bond Yields

2026-08-18 00:54 By Jam Kaimo Samonte 1 min. read

The Nikkei 225 Index dropped 2.54% to close at 67,461 on Tuesday, reversing the previous session’s gains as global bond yields surged amid persistent concerns over inflation and massive government spending.

Japan’s benchmark 10-year government bond yield climbed to around 2.95%, its highest level in three decades on mounting fiscal concerns, as well as growing expectations of an imminent Bank of Japan interest rate hike.

The Takaichi administration’s plan to cut the consumption tax on food to 1% for two years has fueled market concerns, as the government has yet to identify an alternative revenue source.

Notable declines came from technology and consumer stocks, including Kioxia (-7.6%), Taiyo Yuden (-11.5%), Murata (-9.6%), Fast Retailing (-2.3%) and Sony Group (-1.6%).

In corporate news, Situational Awareness sold shares in Japan’s Taiyo Yuden Co. to Citadel and other investors when it offloaded part of its stake this month, representing a significant reduction in its position.



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