Japan Sets 10-Year JGB Coupon at 28-Year High of 2.1 Pct

Tokyo, Jan. 6 (Jiji Press)--Japan's Finance Ministry on Tuesday set the coupon rate for new 10-year Japanese government bonds at 2.1 pct, highest in 28 years.

The coupon rate for the January issue jumped from 1.7 pct the previous month, as long-term interest rates are rising, reflecting the view that the Bank of Japan will continue to raise interest rates.

Higher coupon rates boost debt-servicing costs, putting a strain on public finances.

Due to the aggressive fiscal policy of Prime Minister Sanae Takaichi's administration, long-term interest rates are on an upward trend amid concerns over deterioration in fiscal health.

In its draft budget for fiscal 2026, adopted last month, the government raised the assumed interest rate used to calculate interest payment costs to 3.0 pct from 2.0 pct. As a result, the debt-servicing expenses in the budget amounted to a record 31,275.8 billion yen.

[Copyright The Jiji Press, Ltd.]