Japan’s benchmark 10-year government bond (JGB) yield rose to a 17-year high, reflecting concerns that could spill over to bond markets across other developed economies and reduce demand for riskier assets such as cryptocurrencies and equities.

The yield rose above 1.61%, the highest since 2008. The move follows a dismal auction of the 20-year JGB on Tuesday, indicating investor concern about higher government spending and tax cuts.

Yields on longer-term debt rose to highs seen last month, with the 20-year bond hitting 2.64% and the 30-year climbing to 3.19%, according to data source TradingView.

The increases could easily spill over into U.S. Treasury notes, potentially causing a tightening of financial conditions. For years, the yields remained depressed due to the Bank of Japan’s ultra-easy monetary policy. That capped yields worldwide, especially in advanced nations.

Veteran lawmaker calls for BOJ rate hike

Veteran ruling party lawmaker Taro Kono told Reuters on Tuesday that Japan should raise interest rates and address fiscal imprudence to strengthen the weak yen, which has proven to be inflationary.

The central bank ended a massive, decade-long stimulus program last year and raised short-term rates to 0.5% in January. Since then, it has held rates steady.

Kono’s comment follows a similar remark by the U.S. Treasury Secretary Scott Bessent, who asked the BOJ to raise rates and put a floor under the yen.