Japan 10-year Gov't Bond Yield Hits 3.0 Pct, Highest Since Oct. 1996

TOKYO, Sept 1 (Bernama-Kyodo) -- The yield on Japan's benchmark 10-year government bond rose to 3.000 per cent on Tuesday for the first time since October 1996, partly reflecting market concerns about the country's worsening fiscal health, Kyodo News reported.

The barometer of long-term interest rates crossed the key threshold a day after the estimated size of budgetary requests submitted by government departments for the next fiscal year stood at a record 143 trillion yen (US$890 billion).

While the figure may change, it still reflects Prime Minister Sanae Takaichi's drive to ramp up spending to strengthen the economy, despite the heavily indebted nation's fiscal limitations.

The recent uptrend in Japanese government bond yields comes amid market expectations that the Bank of Japan will raise interest rates at its policy meeting in September.

Japan's recent coordinated currency intervention with the United States has failed to reverse the yen's persistent weakness, adding to inflationary pressures in resource-poor Japan.

Higher bond yields mean higher debt-servicing costs for Japan. Japan's fiscal health is the worst among advanced economies, with outstanding debt twice the size of its economy.

-- KYODO-BERNAMA