Tashkent, Uzbekistan (UzDaily.uz) — Rising government bond yields in the United States, Japan and other developed economies mean that the global cost of capital is increasing.
As of September 2026, the yield on 10-year US Treasury bonds is around 4.8%, while the yield on Japan’s 10-year government bonds exceeded 3% in September for the first time in three decades.
The reasons are broadly similar: inflation risks, high oil prices, large volumes of government borrowing and expectations of tighter central bank policies. In Japan, an additional factor is the normalization of the Bank of Japan’s monetary policy.
For global debt markets, this primarily means a reassessment of risk. If virtually risk-free US or Japanese securities offer higher yields, investors will also demand a larger premium from emerging-market bonds. As a result, new borrowers have to offer higher interest rates, while bonds already in circulation may decline in price.
At the same time, some capital may flow back from emerging markets to developed markets. Japan is particularly important in this regard: rising domestic yields make foreign assets less attractive to Japanese banks, insurers and other major investors. Fitch has already pointed to the possibility that more Japanese capital will remain in the domestic market.
For Central Asian countries, the main risk is that external financing will become more expensive. The longer US and global interest rates remain high, the more difficult it will be to issue new eurobonds and refinance market debt.
Borrowers with substantial new borrowing needs, significant foreign-currency debt and weak credit ratings will be the most vulnerable. At the same time, high global yields may put pressure on regional currencies through portfolio capital outflows and increased demand for the US dollar.
For Uzbekistan, the situation does not appear alarming and remains relatively stable. A significant share of the country’s external public debt is owed to official creditors and has long maturities, keeping refinancing risks relatively low.
The International Monetary Fund (IMF) assesses the country’s risk of debt distress as low. The average spread on Uzbekistan’s dollar-denominated eurobonds was around 159 basis points in 2026. Another positive factor is the inclusion of Uzbekistan’s soum-denominated sovereign bonds in the J.P. Morgan GBI-EM index from 30 September. This expands the potential base of foreign investors and may partly offset the deterioration in the global environment.
Therefore, I would not describe this as the beginning of a crisis in Central Asia’s bond market. Rather, the region is entering a period of more expensive capital and greater investor selectivity.
For countries with sound budgets, moderate debt levels and attractive real yields, market access will remain available, although the cost of financing may increase.
Anna Bodrova, Alpari analyst
