Long-term government bond interest rates rise globally, and remain at high levels in Europe as well. Japanese and U.S. finance ministers confirm cooperation to stabilize the market.

[London Current Affairs] As interest rates on long-term government bonds rise worldwide, government bonds in European countries are also being sold, and long-term interest rates remain at high levels. The recent rise in interest rates in Japan and the United States has had a ripple effect, as well as a resurgence of inflation due to high energy prices due to the worsening situation in the Middle East, and a sense of caution about fiscal expansion due to the political situation in each country.

Concerns about rising interest rates spreading to the rest of the world: Japan and the U.S. work hard to stabilize the market - Cooperation confirmed at finance ministers' meeting

On the 2nd, the yield on 10-year British government bonds hovered around 5.2%, and according to Reuters, it briefly hit its highest level since August 2007. Since Prime Minister Burnham took office in July, he has announced a series of measures to support the lives of the people, and there are growing concerns about the lack of financial resources needed to prepare the budget.

Masayuki Nakajima, senior strategist at Mizuho Bank's European Treasury Department, points out that ``British bonds, which are held by a high proportion of foreign investors, are likely to be linked to rising global interest rates,'' and predicts that the upward trend will continue for the time being.

In France, the yield on 10-year bonds is 4.2%, the highest level since 2008. A selling factor is the view that fiscal expansionary policies are likely to continue ahead of the 2027 presidential election. Germany's 10-year bond yield was also in the 3.3% range, the highest level since 2011.

On the other hand, there is also a lingering view that the concentration of investment in artificial intelligence (AI) could push interest rates even higher. As US IT giants continue to issue corporate bonds, there is a risk that the supply and demand for government bonds will loosen. The European Central Bank (ECB) said in a blog post on August 31 that the impact of corporate bond issuance by US IT giants, which is increasing in the euro zone, is currently "limited," but remains cautious, saying, "We need to carefully monitor the impact."