Iwashita of Nomura Securities has identified three risks behind rising yen interest rates: inflation, yen depreciation and fiscal concerns. The 10-year government-bond yield, a benchmark for long-term interest rates, reportedly exceeded 3% in September and rose to 3.115%.
At the time of the previous contribution in June, three major risks were identified as underlying the rise in long-term interest rates. The same three-risk framework continues to be discussed this time.
Inflation risk is cited as a factor behind rising yen interest rates, with inflation said to be gaining momentum under the influence of globalization. The 10-year government-bond yield, a benchmark for long-term interest rates, reportedly broke above 3% on 1 September and rose to 3.115% on 25 September and 6 October.
The progression of yen depreciation and fiscal concerns are also cited as contributing factors, with the view expressed that the outlook should be reconsidered.