TOKYO: Japan will introduce a new type of floating-rate note that helps investors mitigate the risk from rising bond yields, two government sources told Reuters, a sign policymakers are gearing up for further interest rate hikes.
Japan's Prime Minister Fumio Kishida attends their joint news conference with Bank of Japan Governor Kazuo Ueda after he inspected the process of sending new banknotes to financial institutions, on the day of the new notes of 10,000 yen, 5,000 yen and 1,000 yen went into circulation, at the BOJ headquarters in Tokyo, Japan July 3, 2024. REUTERS/Issei Kato/Pool
The new note will have a short-term duration and a floating interest rate that would rise in accordance with market interest rates, the sources said on condition of anonymity as they were not authorised to speak publicly. The government will aim to issue the new note from fiscal 2026 with two- and five-year bonds seen as possible options, they said.
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