Takaichi Sanae Employs Anime Quote in Investment Pitch, Sparks Online Reaction
Tokyo, December 2nd – Japanese two-year government bond yields reached a 15-year high on December 1st, climbing to 1.015% - a rise of 2.5 basis points – as market expectations for a potential interest rate hike by the Bank of Japan (BOJ) continue to build. The 5-year and 10-year Treasury bond yields also increased,reaching 1.382% and 1.858% respectively, with gains of at least 6.5 basis points. simultaneously, the Japanese yen strengthened against the US dollar, briefly reaching 155.4 yen per dollar.
The shift in market sentiment follows comments from BOJ Governor Kazuo ueda, who stated the bank would carefully consider the advantages and disadvantages of raising interest rates and make decisions accordingly. Hirofumi Suzuki, Chief foreign exchange strategist at Sumitomo Mitsui Bank, attributed the yen’s recognition and rising bond yields to growing expectations of a rate hike.
Financial derivatives markets now predict an approximately 80% probability of a rate increase at the BOJ’s December 19th meeting, a notable jump from the 30% expectation two weeks prior.This probability is projected to exceed 90% before the January meeting.
The rising expectations for monetary tightening come as the yen has depreciated 5% against the US dollar this quarter, and with Japan’s inflation rate remaining above the BOJ’s 2% target. Critics have argued the central bank has been slow to respond to inflationary pressures.
Adding to the financial landscape, Japan’s Ministry of Finance announced plans to issue additional short- and medium-term government bonds to fund Prime Minister Takaichi Sanae’s economic stimulus plan. This includes increasing the issuance of two-year and five-year government bonds by 300 billion yen each (approximately $1.93 billion), and treasury bills by 6.3 trillion yen ($40.5 billion). A recent two-year government bond auction on November 28th revealed weak demand, indicating investor caution amidst the rising risk of interest rate hikes.
The stimulus plan comes as Japan grapples with demographic challenges, rising prices, and significant government debt. Sanae has indicated a move towards a more flexible, multi-year fiscal target, effectively diluting the country’s commitment to fiscal consolidation, according to Reuters analysis. Japan’s fiscal health is currently considered the most precarious among developed nations, as reported by Kyodo News.
Controversial Investment Appeal
In a separate, attention-grabbing move, Prime Minister Sanae reportedly attempted to attract investors using a quote from a popular anime series. She reportedly used the line,”Shut up! Invest all your money in me!” - a phrase known within the anime community for being followed by the character being physically rejected. This unconventional approach sparked a wave of online commentary, with netizens pointing out the ironic context of the quote and its association with failure within the anime itself.
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