Japan's Finance Minister, Masatoshi Kato, stated on Tuesday that as the yield on Japanese government bonds rises, the economy will experience both positive and negative impacts. He pointed out that although higher yields will increase government borrowing costs, they will also raise the interest income for investors, which could have a positive effect on the economy. These remarks appear to aim at alleviating market concerns over rising borrowing costs.
The yield on Japan's 10-year government bonds fell on Tuesday, despite having hit a 17-year high of 1.575% on Monday. Masatoshi Kato emphasized the need for the government to balance the pros and cons of rising yields, considering both the pressure on debt repayment costs and the potential benefits to investors from higher interest income.
These comments came shortly after a statement from Japanese Prime Minister Shigeru Ishiba. He expressed that the government will be "well-prepared" to deal with the sharp rise in long-term bond yields. His remarks reflect the Japanese government's keen attention to recent increases in yields and its readiness to take measures to handle potential economic challenges.
