Japan’s Key Long-Term Interest Rate Hits New 30-Year High

Tokyo, Sept. 2 (Jiji Press)–Japan’s benchmark 10-year government bond yield, regarded as the country’s key long-term interest rate, briefly rose to a new 30-year high of 3.015 pct in Tokyo trading on Wednesday amid concern over rising inflation in the United States. A rise in U.S. long-term interest rates triggered by concerns over inflation due to higher oil prices following a new round of attacks between the United States and Iran sent Japanese bond yields climbing. Expectations that the Bank of Japan will raise interest rates at a faster pace has also driven Japanese interest rates higher. The U.S. Treasury Department said Monday that Treasury Secretary Scott Bessent called on BOJ Governor Kazuo Ueda to raise interest rates during a meeting in Asheville, North Carolina, on Sunday. Bessent “emphasized the importance of sound formulation and communication of monetary policy to anchor inflation expectations and avoid excess exchange rate volatility,” the Treasury Department said in a readout of the meeting. In Japan on Wednesday, Hajime Takata, a member of the BOJ’s Policy Board, said that the central bank will need to raise interest rates in a “nimble manner,” not at a fixed pace, a remark regarded as supportive of a faster pace of rate hikes. Japanese stocks fell on a broad front as concern about a prolonged Iran war weighed on sentiment. The benchmark Nikkei 225 stock index fell 1,889.70 points, or 2.85 pct, to close at 64,325.64. Artificial intelligence-related stocks posted steep declines, an official at a major securities house said. “Japanese companies may see reduced order receipts as higher interest rates tighten the finances of U.S. AI firms,” the official said. END [Copyright The Jiji Press, Ltd.]