Long-term interest rates have risen in Japan's government bond market. The 10-year yield has risen to 2.945% and the 30-year yield to 4.155%, with inflationary pressure stemming from higher crude oil prices and uncertainty over the situation in the Middle East cited as factors.
Japanese government bond yields continued to rise, with the 10-year yield temporarily reaching 2.945% on the 18th, its highest level since September 1996. The 2-year yield rose to 1.700%, its highest level since May 1995, while the 5-year yield rose to 2.180%, setting a new record high. The 30-year yield also rose to 4.155%, approaching the record high of 4.200% reached in May.
There are indications that rising inflationary pressure against the backdrop of higher crude oil prices, along with movements in crude oil supply, demand and inventories, is affecting the rise in yields. WTI futures have remained in the $80s and have not exceeded $100, but they are contributing to higher interest rates in Japan through global price pressures.
Uncertainty over the situation in the Middle East has pushed up crude oil prices, while pressure for a weaker yen is also affecting price trends as the Japanese and US administrations clash over policy intervention involving their central banks. The delayed normalization of the Bank of Japan's monetary policy is also considered a factor driving up interest rates.
In comparisons with the past, some observers have compared the gap between overseas interest rates around 1989 with the current situation, while others have pointed out that the level of interest rates is being assessed relatively within the context of fiscal conditions and deflation. Some analyses also suggest that the delayed reduction of the Bank of Japan's balance sheet is heightening market concerns.