Government spending has become investors' biggest concern, with Japan leading the global decline in long-term government bond yields.

From Japan and Germany to the UK and France, long-term bond yields rose on Monday as concerns about widening fiscal deficits dampened investor demand. Japan's 30-year government bond yield saw its largest increase in two months, while similar-maturity German government bond yields approached their highest levels in 14 years. For these countries, fiscal worries are taking precedence over central bank interest rate policies and becoming the main focus for markets. Although the sell-off in US 30-year government bonds was relatively small, their yields also reached their highest level in a month. Promises of fiscal spending during Japan's election period and the tariff announcement by US President Donald Trump over the weekend were directly responsible for the global rise in long-term bond yields. They have fueled deeper concerns in the market about excessive government debt, rampant fiscal spending, excessive bond issuance, and stubborn inflation in developed countries. "Monetary policy has taken a back seat, with dynamics in budget and government debt taking over as the main focus of policy," said Benoit Anne, senior managing director and head of market research at MFS Investment Management.