Global Debt Burden Intensifies, South Korea Sees Sharpest Rise
Government debt costs continue to rise in various countries. Increasing oil prices, inflationary pressures, and substantial financing requirements have led investors to demand higher yields to purchase sovereign bonds.
Based on Bloomberg data compiled by Visual Capitalist as of 15 September 2026, 10-year government bond yields have risen across all listed countries. The sharpest increase occurred in South Korea, where government bond yields surged by 178 basis points (bps) within a year, rising from 2.81% in September 2025 to 4.59% in September 2026.
Japan follows with an increase of 145 bps, as its 10-year government bond yield rose from 1.58% to 3.03%. Australia, France, and the United States (US) complete the five countries with the largest yield increases.
South Korea leads the surge with an additional 178 bps in one year. This spike brought the South Korean 10-year government bond yield to 4.59%, whereas it stood at 2.81% last September. The rise in yields indicates falling bond prices as investors demand higher returns. This condition typically occurs when markets anticipate sustained high interest rates, rising inflation, or when governments must issue more debt.
Japan follows with a 145 bps increase. The Japanese 10-year government bond yield has breached 3.03%, the highest level in approximately 30 years. This represents a major shift for Japan, which has been known for extremely low interest rates and bond yields for decades. Markets now anticipate that the Bank of Japan will continue to tighten its monetary policy. The rise in yields could also add pressure to the finances of the Japanese government, which holds a massive debt stockpile.
Australia ranks third after its 10-year bond yield increased by 114 bps, rising from 4.27% in September 2025 to 5.41% in September 2026. Australia’s position is now slightly higher than the United Kingdom, which stands at 5.40%.
France follows with a 102 bps increase to 4.50%, a larger rise than that seen in the US, Greece, Italy, or Germany. Fiscal conditions have become a primary concern for investors in France, as the government must finance a wide deficit while debt servicing costs continue to climb.
US Treasury yields have breached 5%, with the 10-year Treasury yield increasing by 97 bps over the year, from 4.04% to 5.01%. During trading on 15 September, the yield briefly touched 5.04%, marking its highest position since 2007. While the increase was not as high as South Korea, Japan, Australia, or France, the movement of US Treasuries has a much broader influence as it serves as the benchmark for borrowing costs in global financial markets. Treasury yields affect mortgage rates, corporate loans, stock valuations, and the debt costs of other nations. The rise in yields also occurs as the US government requires large amounts of funding to finance budget deficits and refinance maturing old bonds.
Why should the rise in yields be noted? Government bond yields serve as a benchmark for borrowing costs across the entire economy. When yields increase, interest rates for mortgages, corporate loans, and various other forms of financing can also rise, forcing households and companies to incur higher costs for seeking loans.
Governments face similar burdens. Maturing old bonds must be replaced with new debt offering higher interest rates. Pressure is becoming increasingly heavy as public debt levels in many developed nations are already at high levels. The rise in yields also affects the stock market. When US government bonds offer returns of around 5%, investors obtain higher returns from relatively low-risk assets. Consequently, stocks and other risky assets must offer greater potential returns to remain attractive. It is unsurprising that global fund managers now view volatility in the bond market as one of the primary risks to financial markets.