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Japan Finance Minister Katsunobu Kato said on Tuesday the bond markets should decide on rate moves after the 40-year government debt yield briefly jumped to a record high.
“We will respond appropriately bearing in mind that the market should be allowed to decide market moves,” Kato said at a regular press conference when asked about rising government bond yields.
Kato declined to comment on factors behind the rising yields, saying doing so would impact the market.
He declined to elaborate on potential responses that the government could take, suggesting authorities are taking the yield moves in stride.
The 40-year government debt yield (JP40YTN=JBTC) briefly hit 3% on Monday, in part due to concerns Prime Minister Shigeru Ishiba’s leadership could be further weakened and hamper fiscal discipline.
Last week, Bank of Japan Governor Kazuo Ueda said bond yield moves were a natural reflection of market expectations of future interest rate hikes by the central bank.
Among other things, higher yields would boost debt-servicing costs for the government. At more than twice the size of its economy, Japan’s public debt is by far the worst in the industrialised world.
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