Long-term interest rate surges to 2.85%, a 30-year high; government to revise draft of 'Basic Policy'

Long-term interest rate temporarily surges to 2.850%, a level not seen since 1996 In the bond market on the 7th, the yield on the newly issued 10-year government bond recorded 2.850%, up 0.020% from the previous day. The background is the view that fiscal expansion and restraint on the Bank of Japan, related to the draft of the 'Basic Policy' of the Takaichi administration, are increasing the risk of price rises. In the market, there is growing caution that the 3% range is also within sight. 123

Nikkei average falls sharply by over 1,480 yen, semiconductor-related stocks broadly lower The Nikkei average closed at 68,256 yen, down 1,480 yen from the previous day. Following a sharp decline in Samsung Electronics, selling pressure hit semiconductor-related stocks, with Kioxia and Tokyo Electron plunging. On the other hand, the TOPIX updated its all-time high in the morning, showing resilience in high-priced stocks, and on the TSE Prime Market, advancing issues outnumbered decliners. 456

Minister Akagi denies restraining rate hikes; yen buying temporary, but maintains 162 yen level Minister of Economic and Fiscal Policy Jiro Akagi on the 7th denied as a 'misunderstanding' the speculation that the draft of the Basic Policy would undermine the Bank of Japan's independence. This comment led to yen buying, and the dollar-yen temporarily plunged to the 161.70 yen level, but afterward, yen-selling pressure strengthened again due to Middle East risks and other factors, and by the afternoon the pair recovered to the upper 162 yen level. The high subscription ratio for the 30-year government bond auction also supported the yen. 789

Samsung Electronics' April-June operating profit at 9.4 trillion yen, 19 times year-on-year In the preliminary second-quarter results announced by South Korea's Samsung Electronics, operating profit reached approximately 9.47 trillion yen, a record high level. While improved semiconductor supply-demand contributed, the results fell short of market expectations, causing the stock price to plunge and spilling over to Japanese semiconductor-related stocks. 10

May coincident index rises for third consecutive month; basic assessment unchanged According to the May Economic Trend Index (preliminary) released by the Cabinet Office, the coincident index, which indicates the current state of the economy, rose 0.4 points from the previous month to 118.5. It was boosted by automobile shipments and food price increases. The basic assessment was kept as 'showing improvement,' and the leading index was positive for the 12th consecutive month. 11