Bank of Japan Governor Kazuo Ueda hinted that the rise in long-term bond yields to their highest level since 2012 was no big problem for him, saying they should be guided by the market.
“Long-term bond yields are determined in principle by the financial market,” Ueda told reporters near the Italian town of Stresa after the G7 finance ministers and central bank governors meeting. “I will continue to pay close attention to market trends.”
Japan's 10-year treasury yield hit a 12-year high on Friday as investors' speculation that the Bank of Japan would raise interest rates further persisted. Ueda's neutral statement shows that at least until now, fluctuations in yield have not met the conditions for action promised by the Bank of Japan.
Minister of Finance, Suzuki Shunichi, who is sitting next to Ueda, suggests that G7 finance ministers understand Japan's situation. He said that his colleagues all think excessive exchange rate fluctuations are harmful to the economy.