Japan Key Long-Term Rate Hits New 30-Year High

Tokyo, Sept. 15 (Jiji Press)--The benchmark 10-year Japanese government bond yield, a key long-term interest rate, rose to a new 30-year high of 3.035 pct on Tuesday after U.S. long-term rates rose on surging crude oil prices.

According to Japan Bond Trading Co., the yield on the newest 383rd issue of 10-year JGBs hit the highest level for a benchmark yield since September 1996.

Crude oil prices soared following a halt to the operations of a key oil pipeline in Saudi Arabia that came under attack. Reflecting concern about accelerating inflation, the U.S. 10-year Treasury bond yield rose above 5 pct, which triggered selling also in the Japanese bond market.

Also behind the JGB selling were concerns about the expansionary fiscal policy adopted by Prime Minister Sanae Takaichi's administration and expectations that the Bank of Japan will accelerate the pace of policy interest rate hikes. The BOJ is expected to decide to raise the policy rate to 1.25 pct at its two-day monetary policy meeting from Thursday.

"The focus is what BOJ Governor Kazuo Ueda will have to say at a press conference after the meeting about the pace of future interest rate hikes," a Japanese securities house official said.

[Copyright The Jiji Press, Ltd.]