(Update) Key 10-year JGB Yield Hits 26-Year High of 2.095 Pct

(The final paragraph should have read, “…156.73-73 yen…,” instead of as sent. A substitute story follows.) (Update) Key 10-year JGB Yield Hits 26-Year High of 2.095 Pct Tokyo, Dec. 22 (Jiji Press)–The benchmark 10-year Japanese government bond yield, the country’s key long-term interest rate, rose to 2.095 pct in Tokyo interdealer bond trading Monday morning, 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 are “very low,” fueling speculation that the central bank will continue to raise interest rates next year. “With the size of the fiscal 2026 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 morning trading Monday, retaking 50,000 for the first time since Tuesday on an intraday basis. The Nikkei average finished the morning at 50,480.76, up 973.55 points, or 1.96 pct, from Friday’s close. Investors took heart from higher U.S. equities late last week and a weakening of the yen. In Tokyo currency trading, the dollar stood at 157.41-42 yen at noon, up from 156.73-73 yen at 5 p.m. Friday. END [Copyright The Jiji Press, Ltd.]