Recently, long-term interest rates in Japan have been attracting attention, and it seems that the 30-year government bond yield has reached a record level. According to reports in late December, the yield on the 30-year bond has risen to 3.45%, and the 40-year bond has also reached 3.715%. Honestly, this movement is quite impactful.

The background is market concerns over the scale of Prime Minister Takashi's economic stimulus measures. There is a growing view that the government might undertake large-scale debt financing. Additionally, the Bank of Japan's continued stance on raising interest rates has caused short-term interest rates to rise in tandem. These combined factors are leading to the sharp surge in the 30-year government bond yield.

Japan is preparing to issue about 29.6 trillion yen in new government bonds for the FY2026 budget, so market concerns are understandable. However, Takashi emphasized in a recent interview that even with an "aggressive" fiscal plan, it does not include irresponsible bond issuance or tax cuts. Still, among investors, there remains a high level of caution regarding future interest rate movements.

In short, the rise in the 30-year government bond yield likely reflects the market's sincere assessment of the balance between Japan's fiscal policy and monetary policy. Depending on future policy developments, further fluctuations are possible.