The Bank of Japan held 470.0 trillion yen of Japanese Government Bonds in June 2026, out of a market of 1,006.5 trillion yen. That is 46.7% of the bond market, so the country's own central bank owns close to half of it.
A Japanese Government Bond, or JGB, is a bond issued by the government of Japan, in yen. Japan sells them from 2 years out to 40 years. This explainer covers who owns them, the long era of near-zero yields that ended in 2024, then why a rising JGB yield is felt outside Japan.
What are JGBs? JGBs are Japanese Government Bonds: debt issued by the government of Japan, in yen, in maturities from 2 years out to 40 years. They fund a government whose gross debt was 204.8% of Gross Domestic Product (GDP) in 2025, the highest of the 224 economies in the International Monetary Fund's database of October 2026.
The Bank of Japan held 470.0 trillion yen of them in June 2026, which was 46.7% of the 1,006.5 trillion yen market.
The 10-year yield closed below 1% on every trading day from 6 April 2012 to 21 May 2024, which is just over 12 years.
That era is over. The 10-year yield was 3.019% on 13 October 2026. Before 2026, the last time it traded at or above that level was 6 September 1996.
What a JGB is, the maturities Japan sells, plus how much Japan owes
A JGB is a loan to the Japanese government. You pay cash up front, then collect a fixed interest payment twice a year, called the coupon. At maturity you get back the sum the bond was issued at, known as its face value.
The yield is the annual return you earn if you hold a JGB to maturity at today's price. Japan sells fixed-rate bonds at six maturities: 2, 5, 10, 20, 30 then 40 years.
Japan also issues 10-year inflation-indexed bonds, Treasury Discount Bills for borrowing of a year or less, plus Japan Climate Transition Bonds at 5 and 10 years.
The amounts are large. The initial plan for the fiscal year to March 2027 is 168.5 trillion yen of market issuance, of which 31.2 trillion yen is 10-year bonds.
Japan's general government gross debt was 204.8% of Gross Domestic Product (GDP) in 2025. That is the highest of the 224 economies in the International Monetary Fund's World Economic Outlook database of October 2026.
The long era of very low yields
Source: Japan Ministry of Finance JGB interest rates; YX Insights
The 10-year yield was 8.105% on 28 September 1990. It then fell for most of the next three decades. It first closed below 1% on 17 September 1998.
The low era was long. The 10-year yield closed below 1% on every trading day from 6 April 2012 to 21 May 2024, which is just over 12 years.
It was negative on 453 trading days between February 2016 and May 2020. Its low was minus 0.297% on 27 July 2016, the lowest in the series as at 13 October 2026.
What ended it was inflation. On 19 March 2024 the Bank of Japan judged that inflation was on track to hold at its 2% target, then dropped the policies holding yields down.
The 10-year yield was 3.019% on 13 October 2026, after a 2026 peak of 3.111% on 7 October. Before 2026, the last time the 10-year yield traded at or above 3.019% was 6 September 1996.
The 30-year yield was at 4.064% on 13 October 2026. Its high of 4.168% came on 6 October 2026, the highest in a series that starts on 2 September 1999.
Yield curve control: what it was, when it ended
On 21 September 2016 the Bank of Japan introduced yield curve control. It committed to buying JGBs at scale to hold the 10-year yield around zero. It also charged minus 0.1% on part of the reserves, the money banks park at the central bank.
Source: Japan Ministry of Finance JGB interest rates; Bank of Japan policy statements; YX Insights
The dashed line is the upper bound the Bank published. It gave no number for the range until 19 March 2021, when it set one at plus or minus 0.25% around zero.
The range then widened to plus or minus 0.5% on 20 December 2022. On 28 July 2023 the Bank began offering to buy 10-year JGBs at 1.0% every business day, which made 1.0% the operational ceiling. It named 1.0% as the upper bound reference on 31 October 2023.
Each step let the yield rise further. The Bank of Japan ended yield curve control on 19 March 2024, along with the negative interest rate policy and its purchases of exchange-traded funds.
Five rate rises followed. The policy rate went to around 0.25% on 31 July 2024, then 0.5% on 24 January 2025. After that came 0.75% on 19 December 2025, 1.0% on 16 June 2026, then 1.25% on 18 September 2026.
The Bank is also stepping back from the bond market. On 16 June 2026 it confirmed it will cut planned monthly JGB purchases by about 200 billion yen each calendar quarter. That runs until January to March 2027, reaching about 2 trillion yen a month from April 2027.
Who owns Japanese Government Bonds
Source: Japan Ministry of Finance, Breakdown by JGB and T-Bill Holders, June 2026 preliminary; YX Insights
The Bank of Japan is by far the largest holder, at 470.0 trillion yen in June 2026. Banks come next with 157.3 trillion yen, then insurance companies with 152.1 trillion yen.
Foreign holders own very little of the bond market, at 79.9 trillion yen, or 7.9%. They are far more present in Treasury Discount Bills, where they hold 51.6% of the 135.5 trillion yen outstanding.
Those bills sit outside the 1,006.5 trillion yen bond total. Counting bonds and bills together, the market is 1,142.0 trillion yen. The same 470.0 trillion yen holding is 41.2% of that wider base.
The domestic base matters. Households, pension funds and public pensions together own another 130.7 trillion yen of the bonds.
Why a rising JGB yield matters outside Japan
Japan's low yields pushed its savers abroad for decades. On 13 October 2026 a Japanese insurer could earn 3.019% at home on a 10-year JGB, with no currency risk. A foreign bond has to pay more than that to match it, before any currency risk.
That shows up in the US Treasury market. At the end of December 2025 Japan was the largest foreign holder, at $1,185.5 billion, against the United Kingdom's $863.1 billion. By the end of July 2026 the Japanese holding was $1,103.9 billion.
The yen is the other channel. Borrowing cheaply in yen to buy higher-yielding assets abroad is known as the carry trade. A higher JGB yield makes that borrowing dearer.
The 2-year JGB yield was 1.911% on 9 October 2026, when one dollar bought 158.34 yen. The US 2-year Treasury yield was 4.80% that day, a gap of 2.89 percentage points. What moves the dollar against the yen comes down mostly to that gap.
How to follow JGB yields, then what they now show
Japan's Ministry of Finance publishes yields for 15 maturities, from 1 year to 40 years, each business day as a free spreadsheet file on its English site. A separate historical file goes back to 1974, which is where the figures here come from.
Those are constant-maturity yields, read off the curve of JGBs trading in the market. That is why the file carries a 1-year yield even though the shortest fixed-rate bond Japan issues runs 2 years.
The Bank of Japan posts its policy statements in English on the day of each meeting, with the meeting calendar a year ahead. The holder breakdown is published quarterly by the Ministry of Finance, built from the Bank of Japan's record of who owns what across Japan's economy.
JGBs are the Japanese government's own bonds, sold from 2 years out to 40 years, with the Bank of Japan holding 46.7% of them in June 2026. The 10-year yield spent over 12 years below 1%. It reached 3.019% just under two years and seven months after the cap came off.
Common questions about JGBs
What does JGB stand for?
JGB stands for Japanese Government Bond: debt issued by the government of Japan, in yen. Japan sells fixed-rate bonds at 2, 5, 10, 20, 30 and 40 years, plus 10-year inflation-indexed bonds and Treasury Discount Bills for borrowing of a year or less.
How much of the JGB market does the Bank of Japan own?
The Bank of Japan held 470.0 trillion yen of Japanese Government Bonds in June 2026, which is 46.7% of the 1,006.5 trillion yen in issue. Counting Treasury Discount Bills as well, its share of the combined 1,142.0 trillion yen market is 41.2%.
What was yield curve control?
Yield curve control was the Bank of Japan's policy of buying JGBs at scale to hold the 10-year yield near zero. It ran from 21 September 2016 to 19 March 2024. The published upper bound rose from 0.25% to a 1.0% reference level before the policy ended.
Why are Japanese bond yields rising?
Inflation returned to Japan, so the Bank of Japan ended yield curve control in March 2024, then raised its policy rate five times to around 1.25% by 18 September 2026. It is also cutting its bond purchases towards about 2 trillion yen a month from April 2027, leaving more bonds for other buyers.
Can foreign investors buy JGBs?
Yes, though foreign investors hold a small slice: 79.9 trillion yen of bonds in June 2026, or 7.9% of the total. Foreign holders are much bigger in Treasury Discount Bills, Japan's bills of a year or less, where they held 51.6% of the market.
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