Thus, the “quiet world” has ended. For the first time in three decades, Japan has regained an interest-rate landscape shaped by market discovery

 After Japan’s asset bubble burst in the early 1990s, the nation entered a long era of low growth and low inflation. Interest rates fell to the world’s lowest levels. The zero-interest policy (1999) and quantitative easing (2001) became permanent fixtures, driving long-term yields below 1%. In 2013, Governor Kuroda launched “unprecedented monetary easing,” and by 2016 the Bank of Japan introduced Yield Curve Control (YCC), fixing the 10-year yield around 0%. Even 30-year bonds yielded under 1%, supporting high equity and real-estate valuations while keeping government interest costs minimal — the foundation of a “quiet world.”

From 2022 onward, global inflation surged while Japan’s policy remained an outlier. The BOJ’s “fixed-rate operations” to cap yields distorted market function and dried up liquidity. In December 2022, the yield band widened from ±0.25% to ±0.5%; in 2023 it was effectively raised to 1.0%, signaling gradual flexibility. In March 2024, the BOJ ended its negative-rate policy and abolished YCC, shifting to a short-term rate target of 0–0.1%, freeing long-term yields to market forces.

By autumn 2025, Japan’s 30-year government bond yield reached 3.3% — the highest since the early 1990s. This marked the symbolic end of the era of suppressed rates. Behind it lay expectations of fiscal expansion, concerns over heavier bond issuance, sticky inflation from wage growth, and rising global yields. Higher long-term rates raise discount factors and pressure asset prices, yet benefit pension and insurance returns. For the government, larger debt-service costs reintroduce tension between fiscal and monetary policy.

Thus, the “quiet world” has ended. For the first time in three decades, Japan has regained an interest-rate landscape shaped by market discovery — a return to an age where yields once again speak the language of the real economy.