A sell-off in Japanese government bonds triggered turmoil, with Japanese and South Korean stock markets opening more than 1% lower.

On January 21, a large-scale sell-off occurred in the Japanese government bond market, with yields on 30-year and 40-year bonds rising by more than 25 basis points in a single day. The 40-year bond yield reached 4%, the highest level since 2007. The market turmoil stemmed from Prime Minister Sanae Takaichi's proposed fiscal plan of tax cuts and increased spending, leading investors to worry about the sustainability of Japan's fiscal policy. As a result, the Nikkei 225 index opened down 718.60 points, or 1.36%, at 52272.50. The South Korean KOSPI index opened down 74.42 points, or 1.52%, at 4811.33. In addition, US Treasury yields also rose to multi-month highs.