Japan’s tax cut pledge sparks bond surge, global markets plunge amid rising debt and trade tensions.

Following Prime Minister Sanae Takaichi's snap election and promise to suspend the 8% consumption tax on food and beverages for two years, which would cost ¥5 trillion annually, Japan's bond yields reached record highs, causing global financial markets to spike in volatility. With Japan's debt-to-GDP ratio at 240%, the move caused 30-year yields to rise to 3.4% and 40-year yields to surpass 4%. As Donald Trump threatened to impose new tariffs on European countries, including a 25% rate unless Greenland is ceded and a 200% tariff on French champagne unless France joins his "Board of Peace," U.S. stocks fell more than 2% and bond yields increased. Fears of financial instability have increased due to rising global debt, which now accounts for more than 235% of GDP. As a result, U.S. yields on 10- and 30-year bonds have risen to 4.29% and 4.92%, respectively. Amid investor anxiety, gold hit new highs.