US long-term interest rates rose to the 4.7% range, while dollar-yen trading remained subdued in the upper ¥159 range. The backdrop includes movements in US interest rates, uncertainty over the situation in the Middle East, and expectations for monetary policy in Japan and the US.
US long-term interest rates briefly rose to the 4.76% range, and there were periods when selling in the bond market kept long-term interest rates elevated. Rising crude oil prices also heightened concerns about inflation, becoming a factor behind the decline in equity markets.
Dollar-yen trading remained within a range of approximately ¥159.60 to ¥160.50. Against the backdrop of renewed tensions in the Middle East, buying of the dollar was limited, with opposing pressures toward both yen depreciation and appreciation coming into play.
Crude oil prices rose in response to worsening Middle East tensions, pushing into the $85 range. This heightened concerns about inflation in the US and affected movements in the foreign exchange and bond markets.
Japan's long-term interest rates also rose in tandem with US long-term interest rates. Budget requests for fiscal 2027 from the Ministry of Finance and government departments are expected to reach a record scale, and it was noted that itemized requests from government departments could lead to higher spending going forward.