Key 10-year JGB Yield Hits 26-Year High of 2.100 Pct

Tokyo, Dec. 22 (Jiji Press)–The benchmark 10-year Japanese government bond yield, the country’s key long-term interest rate, rose to 2.100 pct in Tokyo interdealer bond trading Monday, reaching the highest level since February 1999. The rise is attributed to expectations that the Bank of Japan will continue to raise interest rates as well as concerns over increased JGB issuance due to the aggressive fiscal policy of Prime Minister Sanae Takaichi’s administration. The BOJ decided to raise its policy interest rate from around 0.5 pct to around 0.75 pct at its two-day monetary policy meeting through Friday. BOJ Governor Kazuo Ueda told Friday’s press conference following the policy-setting meeting that real interest rates were “very low,” fueling speculation that the central bank will continue to raise interest rates next year. “With the size of the fiscal 2026 government budget expected to hit a record high of more than 120 trillion yen, there are no buyers for bonds,” an official of a domestic securities firm said. In the Tokyo stock market, the Nikkei 225 average briefly gained over 1,000 points in Monday’s trading, as semiconductor-related stocks were hunted after artificial intelligence-related names fared well in the U.S. market late last week. The Nikkei average finished at 50,402.39, up 895.18 points, or 1.80 pct, from Friday’s close. On the back of the yen’s weakening, export-oriented issues also attracted buying in the Tokyo market. In Tokyo currency trading, the dollar stood at 157.33-35 yen at 4 p.m., up from 156.73-73 yen at 5 p.m. Friday. END [Copyright The Jiji Press, Ltd.]