Live Updates > Live Update Details
2026-05-26 08:52:55
[Mizuho Securities: Middle East Situation Pushes Up Japanese Interest Rates, Sanae Takaichi's Measures to Curb the Trend Have Limited Effect] (1) Yusuke Matsuo, senior market economist at Mizuho Securities, said in a report that Japanese interest rates are likely to continue to rise due to the situation in the Middle East, despite Prime Minister Sanae Takaichi's attempts to curb this trend. The market is worried about further global inflation, and as long as the fundamental issues of the Iranian conflict are not resolved, the upward trend in interest rates will be difficult to slow down. (2) The rise in yen interest rates is also due to two concerns: first, energy subsidies may lead to a medium-term deterioration in Japan's fiscal situation; second, the market believes that the Bank of Japan's move to raise benchmark interest rates is lagging behind the market pace. (3) The report said that Sanae Takaichi initially considered launching a supplementary budget of about 3.5 trillion yen, but ultimately decided to increase reserve funds within the scope of the reduction in the deficit of the previous fiscal year's government bonds (about 3 trillion yen), which reflects her concerns about a sharp rise in long-term interest rates. Since Japan has no additional regular government bond issuance plan, the impact on the supply and demand of government bonds in the short term is expected to be limited.
