The 10-year Treasury briefly poked above 5% this week - peaking at 5.04% on Bloomberg's tape, the highest since 2007 - before backing off. It's the first time it has been there since the October 2023 spike, and this time it arrived with company: Japan's 10-year is above 3% for the first time in three decades, Bunds are at their highest in a decade and a half, gilts are at a post-2008 high, and a Bloomberg gauge of G7 sovereign debt started the month yielding its highest on average since 2000.
The drivers are familiar: oil-fed inflation impulse, massive deficits, and bondholders who have finally started charging for the privilege of holding the long end. The surprise is the geography: the US 10-year has repriced 97 basis points higher over the past twelve months, and that doesn't even make the top four - South Korea is up 178, Japan 145, Australia 114, France 102.
As Visual Capitalist's Dorothy Neufeld explains further, government bond yields are climbing across major economies as investors contend with higher oil prices, inflation pressures, and growing government borrowing needs.
This graphic compares 10-year government bond yields across major economies, based on Bloomberg market data as of September 15, 2026.
Borrowing Costs Reach Multi-Decade Highs
Long-term borrowing costs are reaching levels not seen in decades, with the U.S. 10-year Treasury briefly hitting 5.04% on September 15, its highest level since 2007.
Still, yields have risen faster in South Korea, Japan, Australia, and France than in the U.S. over the past year.
| Country | Sept. 2025 | Sept. 2026 | Change (bps) |
|---|---|---|---|
| 🇰🇷 South Korea | 2.81% | 4.59% | +178 |
| 🇯🇵 Japan | 1.58% | 3.03% | +145 |
| 🇦🇺 Australia | 4.27% | 5.41% | +114 |
| 🇫🇷 France | 3.48% | 4.50% | +102 |
| 🇺🇸 U.S. | 4.04% | 5.01% | +97 |
| 🇬🇷 Greece | 3.33% | 4.28% | +95 |
| 🇮🇹 Italy | 3.48% | 4.42% | +94 |
| 🇩🇪 Germany | 2.69% | 3.54% | +85 |
| 🇵🇹 Portugal | 3.09% | 3.91% | +82 |
| 🇨🇦 Canada | 3.17% | 3.96% | +79 |
| 🇬🇧 UK | 4.63% | 5.40% | +77 |
| 🇪🇸 Spain | 3.24% | 4.01% | +77 |
| 🇳🇱 Netherlands | 2.85% | 3.61% | +76 |
| 🇸🇬 Singapore | 1.76% | 2.51% | +75 |
| 🇲🇽 Mexico | 8.80% | 9.54% | +74 |
| 🇳🇿 New Zealand | 4.30% | 5.03% | +73 |
| 🇧🇷 Brazil | 13.74% | 14.45% | +71 |
| 🇨🇭 Switzerland | 0.19% | 0.55% | +36 |
Japan's rise marks a significant shift from the ultra-low-rate environment that defined its bond market for decades. Its 10-year yield has crossed 3.0%, reaching its highest level in 30 years as markets anticipate further monetary tightening from the Bank of Japan. Higher yields could also add pressure to Japan's already large government debt burden.
The sell-off has also spread across Europe. Germany's 10-year yield reached its highest level since 2009 on September 15, while U.K. borrowing costs have climbed above 5.0%.
How Higher Yields Affect the Economy
Government bond yields act as benchmarks for borrowing costs across the economy. As they rise, financing can become more expensive for mortgages, corporate debt, and other forms of credit.
Governments face pressure as well. Higher yields make refinancing debt more expensive at a time when public debt levels are already elevated across many advanced economies.
The implications also extend to stocks.
With 10-year Treasuries yielding around 5.0%, investors can earn higher returns from relatively safe government debt, raising the hurdle for riskier assets such as equities. Global fund managers now rank turmoil in bond markets as their leading market risk.