Japan Economic News ·
Long-term interest rate at 2.9%, yen at 162 yen level... market warning for Takaichi's aggressive fiscal policy
The Japanese market is facing a simultaneous progression of long-term interest rates at 2.9% (a 30-year high) and the yen at 162 yen to the dollar (a 40-year low), and market confidence in the Takaichi administration's aggressive fiscal policy is wavering. The Nikkei average plummeted due to a halving of semiconductor Kioxia's stock price after losing a patent lawsuit, and the outlook for an FRB interest rate hike within the year and high crude oil prices in the Middle East also weighed on the market. The divergence between corporate performance, such as the three megabanks' net profit exceeding 5 trillion yen, and household sentiment has also become clear.
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Long-term yield surges to 2.9%, yen at 162 yen level... market warns Takaichi's aggressive fiscal policy The yield on newly issued 10-year government bonds rose to 2.9%, a high level not seen in about 30 years. The yen updated its low in 40 years to the 162 yen level against the dollar, and market doubts are growing about the Takaichi administration's 'responsible aggressive fiscal policy' which lacks sufficient financial backing. The IMF also acknowledged a global disinflation stall, which could accelerate the rise in long-term interest rates. 123
Kioxia shares halve in a month, losing 30 trillion yen in market cap due to patent lawsuit and fading AI rally Kioxia received a compensation order of $229 million in a US patent lawsuit, and its stock price plunged 16%. From the peak in June, the market capitalization has lost over 30 trillion yen. The Nikkei average fell again to the 64,000 yen level, and the semiconductor market, which had been all about AI, is suddenly braking. 45
Former FRB official suggests rate hike within year, crude oil breaks $85 amid Middle East crisis Former Cleveland Fed President Mester expressed the view that the FRB needs to raise interest rates within the year. She denied the argument for rate cuts due to the AI boom, and warned that high crude oil prices due to the worsening Middle East situation are strengthening inflation pressure. Due to the intensification of the US-Iran conflict, Brent crude oil broke through $85 per barrel. 367
Three megabanks' net profit exceeds 5 trillion yen, record high due to rising loan rates but deposits neglected The combined net profit for Mitsubishi UFJ, SMBC, and Mizuho for the fiscal year ending March 2026 reached 5.2588 trillion yen, a record high. While the BOJ's rate hike expanded lending margins, deposit rates remain low and unchanged, drawing criticism as a de facto cartel in an oligopolistic market. 8
Apple raises iPhone 17 prices in Japan by 10%, passing on yen weakness costs to consumers Apple raised the price of the iPhone 17 series sold in Japan by about 10%, making the minimum price 142,800 yen. While US prices remain unchanged, the inflated import costs due to the weak yen are directly reflected in the selling price, an event symbolizing the decline in household purchasing power. 9
Japan Economic News
Compact morning updates on key Japanese economic news, including Nikkei, exchange rates, and monetary policy.