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The story
The Trump administration is growing increasingly alarmed by the rapid rise in long-term U.S. interest rates. The worry is that heavier mortgage burdens could hurt Republicans in November’s midterm elections. Treasury Secretary Bessent has said “I can’t control the bond market,” even as he works to calm it. The 10-year Treasury yield briefly hit 5.34% on October 1, its highest level in 24 years. While the surge is attributed to oil prices rising amid worsening conditions in the Middle East and a wave of bond issuance by AI-related companies, there is also strong concern that Japan’s historically high interest rates could spill over into U.S. markets. Ahead of the G20 finance ministers’ and central bank governors’ meeting on the 15th, discussions on 5ch centered on Japan’s fiscal management, ways to tap elderly citizens’ savings, and speculation surrounding government bonds.
[Bangkok, Jiji Press] The Trump administration in the United States is growing increasingly alarmed by the sharp rise in long-term interest rates. The worry is that it will push up mortgage rates, weighing on households and potentially becoming a headwind in November’s midterm elections. Treasury Secretary Bessent has been working to ease anxiety over the relentless rate increases, while also voicing concern that Japan’s historically high interest rates could spill over into U.S. markets.
“I can’t control the bond market. What I can do is get people to stop and think for a moment.” Bessent said this in an interview with U.S. media this month.
Persistent inflation concerns tied to elevated oil prices amid worsening conditions in the Middle East pushed the 10-year Treasury yield to a 24-year high of 5.34% on the 1st. Heavy bond issuance by AI-related companies, fueled by the artificial intelligence investment boom, has also encouraged selling of Treasuries, adding to the upward pressure on rates.
Source: jiji.com / Original article here
What people said
They should raise rates even more — it'd help close the wealth gap.
Japan's still cheap. It's America that's the outlier.
In Japan, inflation and the weak yen are outrunning interest rates, so whoever locked in a mortgage early and bought a condo got incredibly lucky.
It's people with no assets who are in real trouble.
Oh look, Mr. Close-the-Wealth-Gap… there you are again.
Thing is, when rates rise, rent goes up too — landlords took out loans to build those apartment buildings.
Just sell off all the U.S. Treasuries that are causing the weak yen and rising prices — problem solved.
And how exactly are you going to get the dollars to buy oil then?
Not sure why, though. Aren't France and America in way worse shape?
Makes you wonder what they'd say about something like French government bonds.
Don't go pinning the blame on Japan for that.
Still, a war with no end in sight is scary.
It's going to drag on at least until 2030.
People are just too used to zero rates — current inflation is well within the normal range.
And since rates are low relative to inflation, if you borrow and invest in growth sectors now, the falling value of money down the road makes paying back the debt easier.
So aggressive fiscal spending isn't wrong.
Whether it's wrong or not isn't for you to decide — it's global market participants who set long-term rates and exchange rates.
Increase bond issuance now and who's even going to buy it, in a bond market this trashed? Rates are going to go insane.
Somehow it's not any easier to follow.
Too much text, I don't even feel like reading it.
Also, give the characters more exaggerated expressions — the whole point of manga is going over the top with the art (deforume-style exaggeration).
Exactly what it sounds like — Japanese investors just need to exploit Japan's low rates to buy up U.S. Treasuries on the cheap, and America gets steamrolled with no way to fight back. The U.S. has no way to lower its own rates to stop it.
Even trading in yen, exchange-rate swings eat up the gains — you won't profit in the short term.
Who's dumb enough to buy bonds from a country headed for default?
If they put government bonds into NISA (Japan's tax-free investment program) allowances, rates would probably come down. Japan's elderly are sitting on an insane pile of financial assets, after all.
Money held by people age 70 and up has reached 648 trillion yen.
https://www.dlri.co.jp/report/macro/495378.html
Though it's also true that a country where the elderly hoard this much wealth doesn't really have much of a future.
If they fold government bonds into NISA, wouldn't banks go under? There'd be no point keeping money in deposits anymore.
Not all of it goes in, and buying bonds doesn't make the money vanish, you know?
Deposit → bond → reinvestment → bank → loop.
Deposits dip in the short term, but over a longer stretch they actually grow.
Credit unions, co-ops, and agricultural banks might be done for either way — they can't pull in deposits, and they can't lend profitably at these ultra-low rates. As banks, they're cornered no matter what.
Their parent bodies, Shinkin Central Bank and Norinchukin Bank, will probably prop them up, but without real reform now, they'll all go down together.
Decline is what's causing the weak currency, yet they keep jacking up rates and making life even harder for ordinary people.
Nope, can't be used. There was once a PM who jokingly said he'd "dreamed of selling U.S. Treasuries" and ended up forced out in a scandal, lol.
To be precise, an outright threat would cause problems, so if Japan just plays dumb — "We're a nation of law, the government can't interfere with the central bank," "Private citizens are free to buy U.S. Treasuries, we can't ban that" — Japan could rake in profits with no pushback. America has no way to stop it, since it has no room left to cut rates.
And there's some idiot here saying "just put government bonds into NISA" —
but deposits are what fund those bond holdings, so if deposits get pulled out, that's a huge problem.
Banks run deposits into bonds and stocks, so if everyone pulls their money out, bond yields spike and stocks crash.
The whole "from savings to investment" push has already failed badly at this stage.
Everybody needs to keep putting money into their deposit accounts, or this gets ugly.
Haven't you seen the JGB (Japanese government bond) market, lol
Market rates have doubled year-over-year, lol
The BOJ has already lost its grip on governance.
Everyone's screaming for reckless fiscal expansion, so market rates are just going to keep exploding higher, lol
Wouldn't be surprising to see 4% by year-end.
By around this time next year, it might be creeping toward 10%, lol
Oh, that's the Japanese market? I thought you meant America.
Talk about the U.S. market instead.
Foreigners hold a huge share of Japan's T-bills, so I'm saying fiscal collapse could happen this year or next.
I mean, foreigners hold 60% of them.
If they don't roll those over, Japan is finished.
Background and Key Points of This Discussion
The direct trigger behind the surge in long-term U.S. interest rates is that oil prices remain elevated amid worsening conditions in the Middle East, stoking inflation fears, while a boom in bond issuance by AI-related companies is also putting pressure on the Treasury market. Treasury Secretary Bessent’s remark that “I can’t control the bond market” reflects his frustration that rising rates, by pushing up mortgage costs, could hurt Republicans in November’s midterm elections. Within the thread, opinions diverged over how to read the headline phrase “market turmoil triggered by Japan.” This doesn’t mean Japan is causing U.S. rates to rise; rather, it points to the spillover risk that if Japan’s already historically high rates climb further, they could ripple through interest rates worldwide, including U.S. Treasuries. Mixing up this distinction easily leads to the misreading that “Japan is causing trouble for the U.S.” The thread also touched on proposals to put elderly households’ 648-trillion-yen pool of assets to use via government bonds, and on folding government bonds into NISA accounts — but it’s worth noting both ideas remain speculative, with their feasibility and impact on bank operations still unclear.
*This article is excerpted and summarized from the 5ch (Breaking News+) thread “US Alarmed by Surging Rates, Wary of Japan-Triggered Market Turmoil — G20 Finance Ministers and Central Bank Governors Meeting on the 15th.”
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