Long-term interest rates temporarily reach 2.930%, the highest level in about 30 years

The yield on newly issued 10-year government bonds, an indicator of long-term interest rates, briefly reached 2.930% on the 17th, the highest level in about 30 years. Since the Sanae Takaichi administration was inaugurated last fall, long-term interest rates have been rising due to concerns about public finances and the situation in the Middle East, but now expectations of an early interest rate hike by the Bank of Japan have begun to push interest rates upwards.

Long-term interest rates serve as a guideline for fixed interest rates on home loans. Three megabanks, including Bank of Mitsubishi UFJ, raised their fixed interest rates in August, and the average 10-year fixed base interest rate is at its highest level since April 2006, when comparisons can be made. There is a possibility that the current rise in interest rates will lead to an increase in fixed interest rates from September onwards.

Long-term interest rates have been rising at a rapid pace since the inauguration of the Takaichi administration. There has been growing awareness of the risk that the government's fiscal situation could deteriorate under the government's ``responsible and proactive fiscal'' policy, and that prices could worsen due to the worsening situation in the Middle East since February.

In particular, the draft of the ``robust policy'' announced by the administration at the end of June calls for increased issuance of government bonds in the future, and long-term interest rates have risen to over 2.8%. It was called a ``severe shock,'' and the government was busy making amendments to the draft text.

■Two-year bonds also rise, as does the US's intentions...