Long-term interest rates have reached the 3% threshold for the first time in 30 years. The rise is attributed to growing expectations that the Bank of Japan will raise interest rates, drawing market attention to its policy management going forward.
The yield on newly issued 10-year Japanese government bonds reached 3.005%, putting it in the 3% range for the first time since September 1996. The backdrop is seen as including growing expectations for a Bank of Japan rate hike and underlying concerns about global inflation.
The government and the Bank of Japan should regard the 3% level as a warning sign and pursue stability through fiscal discipline and the normalization of monetary policy, it has been argued. The current policy stance raises concerns that it could worsen not only rising interest rates but also higher prices and yen depreciation.