Bond market blowups increasingly follow the same dangerous pattern

A recurring bond-market stress pattern is becoming harder to ignore: yields spike while the currency falls at the same time.
That combination signals investors are not simply demanding more yield. They may also be reducing exposure to the country's assets altogether.
Japan has been dealing with this dynamic for more than two years, the U.K. experienced it during the 2022 Liz Truss crisis, and the U.S. saw a similar episode in 2025.
When bonds and the currency weaken together, fiscal credibility becomes the central market issue.