Japanese government bond yields climbed to multi-decade highs on Tuesday, with the 30-year benchmark touching 3.2%, the highest level since the tenor was introduced in 1999. The 40-year yield rose to 3.44%, its strongest reading since that bond’s 2007 debut, while the 20-year reached 2.66%, the most since 1999. The 10-year yield briefly traded at 1.62%, a peak last seen in 2008, and JGB futures fell to their weakest level since 2009, underscoring the intensity of the sell-off. Against that backdrop, the Ministry of Finance plans to raise its assumed long-term interest rate for compiling the fiscal-year 2026 budget to 2.6%, the highest provisional level in 17 years, according to domestic media reports confirmed by Reuters. Rising yields are set to push the ministry’s request for debt-servicing outlays to a record ¥32.4 trillion ($222 billion), up roughly 15% from the current year and the first time the line item has topped ¥30 trillion. Finance Minister Katsunobu Kato told reporters the government will "closely monitor" the JGB market and pursue "appropriate debt management," while reiterating the importance of stable foreign-exchange moves that reflect economic fundamentals. He declined to comment on specific currency levels or speculate on new tax measures as funding sources. The surge in Japanese yields comes amid sticky domestic inflation and expectations the Bank of Japan will further unwind its long-running accommodative policy.