Japan’s Higher Rates Hit Borrowers, Shift Investments

Japan’s move away from decades of near-zero interest rates is raising borrowing costs for households and may also reshape global bond markets. Some students graduating in 2026 could pay more than 1 million yen extra on interest-bearing loans compared with estimates based on rates when they began borrowing, while higher mortgage costs are adding pressure on homeowners and property investors. At the same time, Japanese investors have more reason to keep money at home as domestic yields rise, potentially reducing demand for foreign debt; France’s bond selloff has been cited as an early sign of that shift. Inflation expectations remain widespread: a Bank of Japan survey found 88.6% of households expected prices to rise over the next year in September, while 86.5% expected increases over five years.