Inflation is worried about rising Japan's 40-year-old national debt return. High
On 24 July, as investors remained unconvinced that the Central Bank of Japan would rapidly tighten monetary policy in order to contain inflation, Japan’s 40-year sovereign debt-receiving stock rose by 10 basis points to 4.010 per cent, and five-year bond-receiving rates rose to their highest level since the 2000 issue. These increases are consistent with the United States Treasury debt, as the rise in oil prices boosts the market ' s expectation that the Fed will increase interest rates. The chief interest-rate strategist for SMBC-surged securities, Atalu Okumura, said: “The market’s focus is on Japan’s central bank’s slow reaction to oil price increases, which prompts investors to demand higher premiums to hold long-term bonds because they fear relatively high inflation risks in Japan. The rate of return is likely to continue to rise as concerns about fiscal expansion increase until the Government finalizes its excise tax relief programme in early August.” Kim Xian
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