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Japan’s 10-year loan costs rose to a 16-year-old on Thursday when Tokyo connected a global bond sale that was triggered by Germany’s decision to spend more for defense.
The return of the 10-year-old Japanese government bond rose by 0.06 percentage points to 1.5 percent, its highest level since 2009. The JGB has increased by almost 0.4 percentage points since the beginning of 2025.
Germany saw its on Wednesday The biggest increase in credit costs in 28 years When his bonds sold hundreds of billions of euros for defense and infrastructure after a historical deal between political parties.
The increase in German bond yields takes place in rising returns in other countries, including Great Britain, to the state plans to increase tax expenses.
Dealers in Asia said that the move was very emotional and it was difficult to recognize behind the sale, especially as large banks and institutions that were buyers of JGBs in March before the end of the Japanese financial year.
“It is a similar story all over the world – a little infection from Germany,” said Mitul Kotecha, a macrost strategist at Barclays.
He added a “shifting of the views in the direction of Japan” after stronger economic growth and higher inflation, he added the market expectations of the Bank of Japan to the expectation of Hawkian politics.
The Boj increased interest rates twice last year because it is trying to normalize monetary policy after years of ultra-low-low interest rates.
The increase on Thursday has been increasing the increase in JGB yields since the beginning of 2025 and, since the Japanese inflation continues to exceed the goal of the central bank.
The uncertainties that were around Japan’s interest view and the JGB market were highlighted on Wednesday by the deputy governor of the Bank of Japan, Shinichi Uchida.
In a speech that touched the current state of the global economy, Uchida pointed to increased geopolitical tensions as one of the factors that “could influence both economic activity and prices in the USA, such as the policy of the new administration”.
Some dealers have started to bet that the Boj would increase the interest rates at its next meeting later in March. However, the majority of the economists continue to predict the next increase in July.
The yen was stable on Thursday until the Tokyo morning and hovered against the US dollar by around 149.2. The Japanese stocks rose in the morning, with the wide Topix benchmark rose by 1.2 percent.
The shares of the two largest defense manufacturers of Japan, Mitsubishi Heavy and Kawasaki Heavy, rose by 10 percent and 9.8 percent, to expectations that Japan will further increase his military editions.
