Long-term interest rates briefly exceeded 3%, raising concerns among younger people about mortgages. Kentaro Yoshimura (吉村 研太郎), branch manager of the Bank of Japan’s Niigata Branch, said that it was important to assess the impact from multiple perspectives.
On 1 September, long-term interest rates briefly reached 3%, while the yield on newly issued 10-year Japanese government bonds, a long-term benchmark, rose to 3.005%. Market participants attribute the increase to expectations of further Bank of Japan rate hikes and fiscal concerns.
Regarding the current environment, Kentaro Yoshimura (吉村 研太郎), branch manager of the Bank of Japan’s Niigata Branch, pointed out that while rising interest rates are pushing up companies’ funding costs, they also have positive effects, such as higher time-deposit rates. He said that it was important to assess the impact from multiple perspectives.
Younger people are focused on rising mortgage rates, with some saying that repayment periods could become longer and others hesitating over when to build a home. Some people interviewed in the community said that repayment periods could extend to as long as 40 years.
The branch manager acknowledged concerns that rising home prices and interest rates could both have a negative impact, while indicating that the Bank of Japan would monitor developments, including feedback from homebuilders. He said that demand would depend on income and broader economic trends, and expressed the view that developments going forward should be assessed comprehensively.