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Japanese long-term interest rates rise to 1.075%, the highest in 12 years

TOKYOMay 30 (News On Japan) – Long-term interest rates have risen, with the yield on newly issued 10-year government bonds in the Tokyo bond market reaching 1.075% at one point, 0.04% higher than the previous day’s close. This is the highest level in approximately twelve years.

The yield on ten-year government bonds, an important indicator of long-term interest rates, serves as a benchmark for fixed mortgage rates and corporate loans. An increase in interest rates can therefore have consequences for the activities of households and companies.

The rise in yields was influenced by comments from US Federal Reserve officials, which led to speculation that the start of US rate cuts may be delayed. This in turn pushed up long-term US Treasury yields. In addition, speculation that the Bank of Japan might scale back bond purchases in a move toward financial normalization led to selling pressure on Japanese government bonds.

As a result, the yield on 10-year government bonds temporarily rose to 1.075%, the highest level in about twelve years.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, analyzed: ‘The behavior of the Bank of Japan will determine the actions of bond market participants, who cautiously observe the situation to find an equilibrium. No decisive factors are expected until the monetary policy meeting next month, but the trend for long-term interest rates is likely to continue rising gradually.”

Source: ANN



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