10-Year JGB Yield Hits New 27-Year High

Tokyo, Jan. 20 (Jiji Press)–The yield on the most recent issue of 10-year Japanese government bonds temporarily rose to 2.38 pct, a fresh 27-year high, in Tokyo trading Tuesday out of concerns about deterioration in the country’s state finances. The 10-year JGB yield, regarded as the country’s benchmark long-term interest rate, has continued to rise sharply in recent sessions as both ruling and opposition parties push to lower consumption tax ahead of a general election. Prime Minister Sanae Takaichi on Monday proposed reducing the consumption tax rate on food products to zero for two years. The Centrist Reform Alliance, formed last week by two major opposition parties, plans to include a permanent zero consumption tax rate on food products in its campaign pledge for the election. If concerns about lax fiscal policy spread, JGB yields will face increased upward pressure. “As opposition parties are also advocating fiscal expansionary policies across the board, Japanese politics as a whole seem to be flouting fiscal discipline,” an official at a domestic securities house said. END [Copyright The Jiji Press, Ltd.]