Fiscal concerns are expected to increase, and the rate of return on Japanese debt has risen to 30 years

On 17 August, Japan’s 10-year national debt return rose by 5.5 to 2.93 per cent, the highest since 1996, and by 5 to 4.06 per cent in the 30-year period, nearing its historic high in May, as a result of fiscal concerns and increased speculation that the market could raise interest rates in the coming months. According to sources last week, Japan’s Prime Minister Takahashi’s government supported the recent increase in the Japan Central Bank’s interest rate, the next one probably in September or October. In addition, as the Government has yet to define how to fund a two-year reduction in food consumption tax, fiscal concerns have also strained the market. Ryutaro Kimura, a senior bond strategist of BAM Paris, stated: “As investors end their summer vacation and market liquidity improves, the bond market is again beginning to account for the possibility of a faster interest rate increase at the Central Bank of Japan.” He noted that unless high-city governments abandoned expansionary fiscal policies, the rate of return could decline more slowly. Kim Xian