Key JGB Yield Hits 29-Year High of 2.600 Pct

Tokyo, May 13 (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 as high as 2.600 pct in Tokyo interdealer trading Wednesday morning. The figure was the highest since June 1997, according to Japan Bond Trading Co. The yield on the 382nd 10-year JGB issue fell to 2.590 pct by late trading. On Tuesday, key U.S. crude oil futures briefly rose above 102 dollars per barrel on growing speculation that the de facto blockade of the Strait of Hormuz would be prolonged. U.S. government data showed the same day that the country’s consumer price index for April rose 3.8 pct year on year, the sharpest growth in about three years. Long-term U.S. interest rates climbed due to receding expectations for an interest rate cut by the U.S. Federal Reserve amid concerns over inflation, and Japanese interest rates followed suit. JGBs came under selling pressure Wednesday also due to speculation that the Bank of Japan would raise the policy rate next month out of wariness over the upside risk of inflation. With the Middle East situation unlikely to be resolved soon, “the long-term interest rate may rise to around 2.8 pct this week,” an official at a Japanese securities house said. END [Copyright The Jiji Press, Ltd.]