Japanese bond yields hit all-time highs across the board, with the OECD calling on the Bank of Japan to continue raising interest rates

May 13th news, Japanese government bond yields rose across the board. Among them, the 5-year government bond yield increased to 1.934%, reaching a record high;

The 10-year government bond yield temporarily rose to 2.594%, the highest level since May 1997; meanwhile, the 20-year government bond yield increased to 3.500%, also setting a new record.

At the same time, according to a recent assessment released by the Organisation for Economic Co-operation and Development (OECD), the Bank of Japan's benchmark interest rate may reach 2% by the end of 2027, provided Japan's inflation rate can stabilize around 2%.

The report also pointed out that current interest rates are still close to the lower end of the neutral rate range (between 1.1% and 2.5%), and recommended that the Bank of Japan continue gradually raising rates to prevent the economy from overheating.

According to previous estimates by the Bank of Japan, Japan's current nominal neutral interest rate is between 1.1% and 2.5%, but the specific level remains highly uncertain. This also means that Japan's future interest rate decisions will face complex economic conditions and many variables.

It is worth noting that among major global central banks, the Bank of Japan is the last to exit ultra-loose monetary policy, and its rate adjustments have far-reaching impacts on global arbitrage trading and capital flows.

However, as government bond yields curve rises across the board, Japan's role as the "world's last cheap funding source" is weakening, which may trigger international investors to reallocate assets, potentially causing a chain reaction in the global bond market and risk assets.

#日本国债收益率 #Bank of Japan interest rate