As the Takaichi administration approaches its first anniversary, long-term interest rates have exceeded 3%, and the yen's downward trend continues even after an additional Bank of Japan rate hike. While concerns over an aggressive fiscal and monetary easing policy grow, market movements are becoming a critical response to the government's policies.
The article opens by noting that one year has passed since the Takaichi Sanae (高市早苗) administration came to power, and reports that long-term interest rates have risen in the bond market, with the 10-year government bond yield exceeding 3%. It presents the view that rates will continue to rise despite Bank of Japan rate hikes.
In the foreign exchange market, the yen has continued to weaken, with the yen exchange rate at times approaching the ¥160 range. Some observers also say that the perception of the Takaichi Sanae (高市早苗) administration as opposed to rate hikes and welcoming yen depreciation is becoming more entrenched.
In the equity market, although certain factors supported prices, the article says there is little basis for concluding that the market was driven across the board by Takaichi policies. Share prices remain at high levels, while economic and fiscal concerns weigh on the market.
Overall, the analysis presented is that, against a backdrop of inflation concerns and anxiety over weakening fiscal discipline, financial markets are showing signs of turning against the government's policies.