The Japanese government on Tuesday sought to reassure financial markets that it remains committed to fiscal discipline, pushing back against concerns that its latest economic policy blueprint signals a softer stance on public finances and increased pressure on the central bank to keep interest rates low, Reuters reported.
The clarification comes after Japanese government bond (JGB) yields climbed sharply, with the benchmark 10-year yield reaching a 30-year high of 2.83% on Monday. Investors grew concerned that the government's emphasis on higher public spending and changes to its fiscal targets could worsen Japan's already heavy debt burden while delaying further interest rate hikes by the Bank of Japan (BOJ).
