INTEREST RATES AND CURRENCIES: Japan’s ten-year interest rate at its highest level since the 90s

The yield on Japan’s 10-year government bond rose to its highest level since 1996, rising 5.5 basis points to 2.93 percent on Monday morning.

At 15:33 in the afternoon, the rate was 2.907.

The background is fiscal concerns and growing speculation that the country’s central bank may raise interest rates in the coming months, the news agency Bloomberg reports.

Prime minister Sanae Takaichin the government is positive about the central bank raising interest rates in the near future, with the next move likely in September or October, sources close to the matter said last week, according to Bloomberg. Fiscal concerns are related to how Japan plans to finance a plan to cut sales tax on food over the next two years.

As investors return from summer vacations and the market’s liquidity improves, the interest rate market will once again begin to price interest rate hikes at a faster pace than before, he estimates BNP Paribasin senior strategy Ryutaro Kimura.

“Unless the Takaichi administration abandons its commitment to accommodative fiscal policy, any decline in yields is likely to be gradual, meaning investors need not worry about missing a buying opportunity,” Kimura told Bloomberg.

Expectations of a tightening of monetary policy have also strengthened in other parts of the world.

Japan’s 30-year interest rate rose by 6.3 basis points to 4.049 percent.

Changes in interest rates in the United States

In the US interest rate market, the interest rate on the ten-year loan was 1.6 percentage points higher at 4.708 percent.

At 4:30 Finnish time, the Empire Manufacturing index, which measures New York’s industry, was published using a survey, which was more lively than expected. After the announcement, the interest rate market saw some movement.

The two-year loan was up 0.4 interest points at 4.173 percent, the 30-year loan was up 2.2 interest points at 5.282 percent.

In Europe, the ten-year German bond was up 0.7 interest points at 3.209 percent, the French bond was up 0.1 interest points at 4.046 percent and the British bond was at zero interest points at 5.036 percent at 3:40 p.m.

Currency

The US dollar has weakened against most currencies on Monday. The euro has strengthened against the dollar.

At 3:41 p.m., one euro was worth 1.1592 dollars, 184.63 yen, 0.85514 pounds and 11.005 Swedish kronor.