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Japan To Raise I R In An Orderly Fashion

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Japan MOF Official: Need To Prevent Disorderly Rate Rises

TOKYO -(Dow Jones)- A senior Japanese Ministry of Finance official said Wednesday that it's necessary to prevent disorderly rises in short-, medium- and long-term interest rates.
But as the U.S., Europe and Japan all head toward a tightening of credit, G7 nations need to closely watch how these moves could affect growth and fund flows in Asian economies, the official said.
"There will be more focus on monetary issues" at Friday's G7 meeting than in the past, he said.
The U.S. Federal Reserve is likely to raise rates again in May, while the European Central Bank appears to be on a path of steady rate hikes after tightening policy in December for the first time in five years.
The Bank of Japan is also heading toward a gradual credit tightening after ending its ultra-easy policy in March.
While the BOJ has signaled it will keep rates near zero for some time, expectations that it will hike rates soon have sent JGB yields surging.

As Japan, US and the EU begin to tighten rates the future of Gordon's BoE policy remains cloudy. Odd that BoE was not mentioned in the above Dow Jones report?


Japan's long-term interest rates may rise further

After crossing a threshold of 2.0 pct Tuesday, Japan''s long-term interest rates may rise further on growing inflation concerns amid record-high crude oil prices and the brisk performance of Japanese and overseas stock markets.
The yield on the newest 278th issue of 10-year JGBs, carrying a 1.8 pct coupon, briefly climbed to as high as 2.0 pct in interdealer trading Tuesday, a level unseen since August 1999, compared to 1.960 pct late Monday.
The long-term yield started its uptrend even before the Bank of Japan scrapped its quantitative easing monetary policy in early March. Its upward momentum has been accelerated by speculation that the BOJ would raise interest rates several times by the end of this year from current levels near zero pct.
Market participants now find it difficult to buy bonds in global markets, as the U.S. Federal Reserve is maintaining a rate hike campaign and, as a result, Japan, the United States and Europe are expected to simultaneously tighten credit.
Takahide Kiuchi, senior economist at the Nomura Securities Financial and Economic Research Center, said that although the bond market is falling a little too fast, it comes as no surprise to see the
10-year JGB yield rising toward levels above 3 pct
, considering Japan''s present economic health.

50% hike in the 10 year JGB from 2% to 3% could mean some extremely sharp rises at our end. :o

Edited by Realistbear
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TOKYO -(Dow Jones)- A senior Japanese Ministry of Finance official said Wednesday that it's necessary to prevent disorderly rises in short-, medium- and long-term interest rates.

I wonder why they are so worried?

They will be putting artificial pressure on rises so that more pressure will build and ultimately this will mean quicker rate hikes later on will be neccessary.

I wonder how long it will take and how high they can go? 5 years and 8%?

I think the US government could see this coming as far back as last June

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