Global bond yields 2026: US, UK, Germany and Japan at multi-year highs. Where is Hong Kong?
The US 10-year reached 5.31%, its highest since 2002, and Japan's passed 3% for the first time since 1996. Hong Kong's 10-year rose 92 basis points this year to 4.045%, its highest daily level since November 2023, but still below the 4.25% Base Rate.
In 2026 long-term interest rates rose together in the world’s largest bond markets. Several reached levels not seen for one or two decades. Hong Kong was carried along, but it ends up in a different place.
How high did the four major markets go?
How high did the four major markets go?
10-year, latest
Shared linear scale from zero. Selected entries from the table below. Its dates, units, definitions and limitations still apply.
| Market | 10-year, start of 2026 | 10-year, latest | 2026 high | Highest since |
|---|---|---|---|---|
| United States | 4.19% (2 January) | 5.28% (7 October) | 5.31% (5 October) | 2002 |
| United Kingdom | 4.517% (2 January) | 5.337% (6 October) | 5.383% (28 September) | 2007 |
| Germany | 2.96% (2 January) | 3.55% (7 October) | 3.69% (28 September) | 2011 |
| Japan | 2.111% (5 January) | 3.111% (7 October) | 3.111% (7 October) | 1996 |
Sources: US Treasury, Bank of England, Bundesbank, Japan Ministry of Finance, each on its own official yield curve.
What about 30-year bonds?
The longest maturities moved most. The US 30-year was 5.67% on 7 October, its highest since 2002. The UK 30-year passed 6% intraday on 1 October, reported as the first time since 1998. Germany’s 30-year reached 4.03%, the highest since April 2011, and Japan’s 30-year hit 4.168% on 6 October, the highest since the bond was first issued in 1999.
Why are long yields rising everywhere?
| Force | Evidence |
|---|---|
| Oil and inflation | The Iran war began on 28 February 2026. Brent futures went from about US$70 to an intraday US$126.41 on 30 April and were around US$105 on 8 October. US CPI rose 3.4% in August (energy +16.3%), UK CPI 3.1%, and the euro area flash estimate for September 3.8% |
| More government bonds | Germany plans record issuance of about €525.5 billion in 2026; Japan’s new bond issuance for fiscal 2027 is reported at about ¥40 trillion, against ¥32.7 trillion; the UK plans £246.2 billion of gilts in 2026-27; the US ran a deficit of about US$2 trillion in the first 11 months of fiscal 2026 |
| Term premium | The New York Fed’s ACM estimate for the US 10-year rose from 0.790% (2 January) to 0.962% (5 October), the highest since July 2014 |
New York Fed ACM term premium on the US 10-year, 5 October 2026. Highest since July 2014
The term premium is the extra return investors want for locking money up for ten years instead of rolling over short-term loans. When it rises, long yields can climb even if expected policy rates do not.
France pulls away from Germany and Italy (updated 19 October)
Since this note was first published, the sharpest move in Europe has been in France rather than Germany.
| Date | France 10-year | Germany 10-year | Gap |
|---|---|---|---|
| 2 September 2026 | 4.24% | 3.39% | 85 bp |
| 2 October 2026 | 4.90% | 3.43% | 147 bp |
| 16 October 2026 | 4.79% | 3.42% | 137 bp |
Source: ideal-investisseur daily OAT-Bund table, from Banque de France and Bundesbank data. On 2 October the French 10-year touched 4.994% intraday, the highest since 2002 (Boursorama, citing Reuters).
Italy’s 10-year was about 4.50% on 16 October (Trading Economics), so France now pays roughly 29 basis points more than Italy. The German yields in this table are the benchmark-bond closes from that daily table, while the first table in this note uses the Bundesbank’s yield curve, so the two sets of German figures do not match exactly.
The extra cost sits on France alone. France and Germany share the euro and the ECB’s 2.50% deposit rate, so the widening gap is a premium for French fiscal and political risk: a deficit of 5.4% of GDP in 2026, a 2027 budget that aims for 5.0%, and a minority government facing its first budget vote on 20 October. Hong Kong’s 10-year, at 3.996% on 15 October, was 74 basis points below France’s 4.74% that day, despite far lower government debt. We compare debt, deficits, growth and ratings in France now borrows above Italy: where does Hong Kong stand?
Ten-year yields against policy rates
| Market | Policy rate | 10-year | 10-year minus policy |
|---|---|---|---|
| United States | 3.75–4.00% | 5.28% | +1.28 points (against the upper bound) |
| United Kingdom | 3.75% | 5.337% | +1.59 points |
| Germany (euro area deposit rate) | 2.50% | 3.55% | +1.05 points |
| Japan | 1.25% | 3.111% | +1.86 points |
| Hong Kong | 4.25% (Base Rate) | 4.045% | −0.20 points |
In the four large markets, long yields sit well above policy rates. Hong Kong is the exception. Its Base Rate of 4.25% follows the US federal funds target range plus 50 basis points under the peg, and is not a measure of local short-term borrowing costs; one-month HIBOR averaged 2.90% in September.
Where does Hong Kong sit?
Hong Kong’s 10-year moved with the global wave. From 3.122% on 2 January to 4.045% on 7 October 2026 (ADB AsianBondsOnline, data: Bloomberg), it rose 92 basis points.
Hong Kong 10-year yield, 2 January to 7 October 2026 (3.122% to 4.045%). US 10-year over the same period: +109 bp
| Measure | Hong Kong |
|---|---|
| Highest close in 2026 | 4.048% (6 October), highest since 7 November 2023 |
| Lowest close in 2026 | 2.705% (2 March) |
| September 2026 monthly average | 3.71%, highest since February 2025 |
| Rank of that average since November 1996 | 140th of 359 months |
| Record monthly average | 10.15% (July 1998) |
So Hong Kong took most of the US move, as the peg would suggest, but in its own history the level is unremarkable. Unlike the US, UK or Japan, it is not near a multi-decade high. The rise from March was also steeper than the rise over the full year: Hong Kong’s 10-year added more than 130 basis points from its March low.
- Update, 19 October: on 15 October Hong Kong’s 10-year was 3.996%, 74 basis points below France’s 4.74%. The gap reflects Hong Kong’s link to US rates more than any difference in fiscal strength.
A higher long-term rate changes what future amounts are worth today. To estimate a future amount under different trends, open the future need calculator.
Estimate a future amount in HKD →
The four large markets use each country's official yield curve; Hong Kong's daily figures are ADB AsianBondsOnline data sourced from Bloomberg, so levels are not perfectly comparable across rows. Policy rates are as at early October 2026. The 30-year UK figure and several issuance figures come from press reports. The three explanations are common interpretations, and their relative weight is debated.
Questions & answers
How high are global bond yields in 2026?
The US 10-year closed at 5.31% on 5 October 2026, the highest since 2002. The UK 10-year reached 5.383% on 28 September (highest since 2007), Germany's 3.69% on 28 September (since 2011) and Japan's 3.111% on 7 October (since 1996).
Why are long-term yields rising?
Three explanations are commonly given: oil and inflation pressure after the Iran war began on 28 February 2026, record or near-record government bond issuance in Germany, Japan and the UK alongside large US deficits, and a higher term premium demanded for holding long bonds.
Did Hong Kong's bond yields rise as much?
Nearly. Hong Kong's 10-year rose 92 basis points from 2 January to 7 October 2026, compared with 109 for the US 10-year. It reached 4.048% on 6 October, the highest close since November 2023, but remains far below its 1998 peak.
Why is France the one under pressure within the euro area?
Because France and Germany share a currency and an ECB policy rate, so the gap between their yields mostly reflects France itself. Its deficit is 5.4% of GDP in 2026, the 2027 budget aims for 5.0%, and the government has no majority ahead of a first vote on 20 October. The French 10-year was 137 basis points above Germany's on 16 October, against 85 on 2 September, and above Italy's of about 4.50%.
Source
- US Department of the Treasury - Daily Treasury par yield curve rates ↗
- Bank of England - Interactive database (IUDMNPY) ↗
- Deutsche Bundesbank - Interest rates and yields ↗
- Ministry of Finance Japan - JGB interest rates ↗
- Federal Reserve Bank of New York - ACM term premia ↗
- ADB AsianBondsOnline (data: Bloomberg) - Hong Kong, China bond market ↗
- HKMA - Adjustment of Base Rate, 17 September 2026 ↗
- The Edge Malaysia (Bloomberg) - Japan budget request and bond issuance ↗
- ideal-investisseur - OAT-Bund spread, daily table (data: Banque de France, Bundesbank) ↗
- Boursorama (Reuters) - French 10-year touches highest since 2002, 2 October 2026 ↗