While the yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, has moved into the 3% range, Japan's interest rates have been rising at a pace different from that seen elsewhere in the world. This article examines the view that yen depreciation and Japan-specific factors are pushing up interest rates.
The yield on newly issued 10-year Japanese government bonds, a benchmark for long-term interest rates, has been reported to have entered the 3% range, and the rise in yen interest rates has resumed. US yields also rose to around the 4% range for a time, but the focus here is on the particularly pronounced rise in Japan's long-term interest rates.
Global pressure for higher interest rates is certainly present, but since 2022, when the yen's depreciation began, Japan's interest rates have been rising at a faster pace than those in other countries. Analysis indicates that Japan's interest rates have continued to rise relatively quickly even since negative interest rates were ended in March 2024.
There are also interpretations focusing on the impact of fiscal policy, but this article notes that inflationary pressure from yen depreciation through import prices is often positioned as a factor behind interest-rate movements since 2024. One view is that this should be regarded as a market phenomenon specific to Japan.
It is not appropriate to characterize the current rise in yen interest rates as an unavoidable consequence of a global trend, and the article argues that judgments must take domestic Japanese factors into account.