Japan Key Long-Term Rate Hits 18-Yr High of 1.935 Pct

Tokyo, Dec. 4 (Jiji Press)–The yield on the most recent issue of 10-year Japanese government bonds, regarded as the country’s benchmark long-term interest rate, rose to 1.935 pct, the highest level in about 18 and a half years, in Tokyo interdealer trading Thursday. JGBs came under selling on growing speculation that the Bank of Japan will raise interest rates more than once and on concerns that Japan’s fiscal health will deteriorate further due to the aggressive spending policy of Prime Minister Sanae Takaichi’s administration, market sources said. On Monday, BOJ Governor Kazuo Ueda told a news conference that the current interest rates are “basically lower than the neutral rate,” which neither slows down nor accelerates the economy. “Speculation is spreading that the BOJ will raise interest rates this month and next year,” an official of a Japanese securities house said. In response to the sharp rise in the key long-term interest rate, Japanese Chief Cabinet Secretary Minoru Kihara said at a press conference the same day that the government is “closely monitoring the situation.” On the Tokyo Stock Exchange, the key Nikkei 225 stock average surged 1,163.74 points, or 2.33 pct, from the previous day to finish Thursday’s trading at 51,028.42, as investors bought on anticipation that the U.S. Federal Reserve will lower interest rates soon. The broader TOPIX index logged an all-time closing high of 3,398.21, rising 63.89 points, or 1.92 pct. END [Copyright The Jiji Press, Ltd.]