S&P says Japan’s bond yields are soaring amid the yen’s slump

• S&P said Japan’s bond yields are rising amid the yen’s slump, which could be linked to the prospect of a further increase in the country’s interest rates.
• AP reports that the yield gap on the Japanese government bond curve narrowed by 1% to 156.34 yen.
• BBC writes that the bond yield spread has been falling since 2011; the material also cites the view of the International Monetary Fund that Japan’s financial system has been facing a decline in profitability.

S&P said Japan’s bond yields are rising, which could be linked to the prospect of a further increase in the country’s interest rates. AP and BBC, citing official statements, explained the reasons for the jump.

According to AP, by the end of the day the yield on the Japanese bond curve was above 163 yen, while the spread on the government bond curve was slightly below 160. In the BBC material, it is stated that the bond yield spread has been falling since 2011, when the country’s economy began to experience a decline in its financial performance. The material also notes that the IMF said Japan’s financial system would require further reforms.

According to BBC, the Japanese finance ministry said that the widening spread of US Treasury Department bonds is due to the fact that the yen is weakening. The material also states that the IMF said the spread of the Japanese bond curve would continue to widen.

Reuters, referring to what BBC reported, says the spread on the Japanese government bond curve: the yield on the 10-year bond was 157.07 yen, while the yield on the 20-year bond was 157.70 yen. BBC also notes that the Bank of Japan expects to buy $59bn in US dollars for the next quarter through intervention.

Global Times adds that the Japanese finance ministry’s statement is based on the fact that the spread of the Japanese bond curve is due to the yen’s weakening, which is related to the country’s debt. Global Times also cites a Joint Statement between the countries’ finance ministries, in which it is stated that the widening spread of the Japanese bond curve is due to the fact that the yen’s weakening is caused by the US.

Tags: USA/Politics/Economy