Japan is entering a stage of rising interest rates. In January this year, the Bank of Japan raised its policy interest rate from 0.25% to 0.5%, the highest level since 2008. This follows previous rate hikes in March and July 2024.
Recently, the yield on Japanese government bonds has risen significantly. On June 9th, the yield on 30-year Treasury bonds increased by 4 basis points to 2.915%. On June 7th, the long-term yield on newly issued 10-year Treasury bonds rose to 1.000%.
Auctions of long-term bonds have also faced repeated cold spells, increasing the pressure on the government to adjust bond issuance.
Japanese Prime Minister Shigeru Ishiba noted that Japan has long been in a state of low interest rates, and some people may not be fully aware of the impact of rising interest rates.
Moreover, rising interest rates will increase the cost of government debt financing and put pressure on spending. The market also expects that the Bank of Japan may continue to raise interest rates in the future.
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