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Japan 10-year government bond yield rises to 2.83% as government defends fiscal blueprint

Japan 10-year government bond yield rises to 2.83% as government defends fiscal blueprint

Economy Minister Minoru Kiuchi said a draft policy blueprint does not seek to restrain Bank of Japan rate moves or signal weaker fiscal discipline after 10-year JGB yields hit their highest level since 1996.

Summary

Japan's 10-year government bond yield rose to 2.83%, or 2.815% in earlier reporting, reaching its highest level since 1996 and described as a 30-year high. The move pushed Japanese sovereign borrowing costs to a multi-decade high as investors worried that the government's draft economic blueprint could weaken fiscal reform commitments and lean on the Bank of Japan to keep interest rates low. Economy Minister Minoru Kiuchi said that interpretation was a misunderstanding and said the government remained committed to fiscal discipline.

Terms & Concepts
  • Japanese government bond (JGB): Debt security issued by Japan's government.
  • BOJ: Bank of Japan, the country's central bank.
  • debt-to-GDP ratio: A measure comparing government debt with economic output.