10-Year JGB Yield Hits New 29-Year High of 2.8 Pct

Tokyo, May 18 (Jiji Press)--The yield on the latest issue of 10-year Japanese government bonds, the benchmark long-term interest rate in the country, briefly climbed to 2.8 pct in Tokyo trading on Monday, its highest level in 29 years, amid inflation concerns.

A rise in U.S. crude oil prices fueled inflation concerns on Friday, adding to speculation that the Federal Reserve will raise interest rates. The yield on 10-year U.S. Treasury notes hit a one-year high.

"Given global inflation, it would come as no surprise if Japanese long-term interest rates exceed 3 pct," an official at a foreign securities firm in Japan said.

Japanese interest rates have also come under upward pressure amid renewed concerns about deteriorating fiscal conditions as the government is considering compiling a supplementary budget.

Higher interest rates in both Japan and the United States sent Japanese stocks lower. The Nikkei 225 average briefly lost over 1,000 points before finishing the morning at 60,843.09, down 566.20 points, or 0.92 pct, from Friday's closing.

[Copyright The Jiji Press, Ltd.]