TOKYO - Japan's benchmark long-term interest rate reached 3% on September 1, its highest level since 1996, as government bond selling accelerated on expectations of a possible Bank of Japan rate hike, rising U.S. yields and growing concerns over Japan's fiscal outlook.
In the bond market, the yield on the 10-year Japanese government bond, a key benchmark for long-term interest rates and fixed-rate mortgages, reached 3% at around 12:30 p.m.
Long-term rates have risen rapidly since the start of the week, driven by several factors.
Market participants have increasingly speculated that the Bank of Japan could raise interest rates as early as September, while long-term interest rates in the United States have also moved higher.
Selling of Japanese government bonds accelerated further as concerns grew over the country's fiscal position, with total budget requests for the next fiscal year expected to reach a record high.
Market participants said the 3% level may only be a milestone rather than a peak, with one saying the upward trend in long-term interest rates is unlikely to change in the near term.
Source: TBS
