TOKYO - Japan's benchmark long-term interest rate climbed to 3.115% during trading, reaching its highest level in nearly 30 years for the second consecutive day as persistent inflation concerns and expectations of further interest rate hikes fueled selling in government bonds.
Selling continued in the Japanese bond market, pushing the yield on the benchmark 10-year Japanese government bond to 3.115%, up from 3.075% the previous day. The yield has now surpassed its highest level since August 1996 for two consecutive days.
Bond yields move inversely to prices, meaning that yields rise when investors sell bonds and their prices fall.
Continued instability in the Middle East and persistently high crude oil prices have heightened concerns about inflation, triggering selling in U.S. government bonds. The yield on the benchmark U.S. 10-year Treasury temporarily exceeded 5.2%, with the selling pressure spreading to Japanese government bonds.
Expectations that central banks around the world will continue raising interest rates to contain inflation have added to the downward pressure on bond prices.
In Japan, speculation that the Bank of Japan will introduce another interest rate hike sooner than previously expected has discouraged investors from aggressively buying government bonds, contributing to the continued rise in long-term interest rates.
Source: TBS
