US 10-year Treasury yield rose to 4.867%, its highest in nearly three years; the 2-year yield climbed to 4.449%, the highest since July 2024.

The State Council General Office issued a notice on addressing delayed payments to SMEs, requiring government procurement projects to be paid in full in cash and adding timely payment to government procurement oversight. It ordered strengthened, whole-process supervision of government investment funds from allocation to disbursement; project owners must prioritize cash payments and require main contractors to pay subcontractors promptly, passing through a cash share at least equal to what they received. Existing completed but unsettled government investment projects must promptly complete financial close and settle outstanding project payments to accelerate subcontractor and migrant-worker wage payments. The notice tightens supervision of the Administrative Regulations on State-owned Assets in public institutions and mandates strict adherence to deadlines from completion acceptance to final financial settlement. Public institutions must comply with statutory payment terms for procurement of goods, works and services from SMEs. Cases flagged by the national complaints platform for overdue SME payments will receive targeted supervision, mandatory rectification deadlines, and, if necessary, region- or industry-level public notices.

REUTERS SURVEY — 74% of economists say Japan's total budget requests for fiscal 2027 have heightened market concerns about fiscal discipline.