March 12, 2025 at 12:06AM
Bank of Japan Governor Ueda
Markets set long-term rates.
We don’t see a big divergence between our view and that of the markets when asked about recent long-term rate rises.
It is true that long-term rates have been rising as a trend since last year.
Long-term rate movements reflect the market’s view on economic and price developments, as well as changes in overseas rates.
It is natural for long-term rates to move in a way that reflects the market’s outlook for the short-term policy rate.
The rise in long-term rates is likely to push up the cost of funding government finances.
It wasn;t too long ago that Ueda was called upon to calm the market over higher long term rates. You may recall the trashing yen stood that day until Ueda calmed everyone down with his promise to step into the JGB market with bids, if necessary:
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This article was written by Eamonn Sheridan at www.forexlive.com.
