Katsuhiko Kato, chairman of the Japanese Bankers Association, said at a regular press conference on the 17th that the recent rise in interest rates, which has at times pushed the yield on newly issued 10-year government bonds above 3%, reflects economic growth accompanied by an exit from deflation and a virtuous cycle of wage increases, and that with corporate profits expanding, the increase in interest payment costs can be sufficiently absorbed. Regarding the relationship with the rising trend in corporate bankruptcies, he expressed the view that the impact of higher prices, labor shortages, and difficulties in finding successors is in fact greater. On the other hand, he pointed out that if interest rates continue to rise further, companies with high borrowing ratios will see their business performance affected, and said it is important to closely monitor corporate management conditions and respond quickly. On that basis, he said he wants to strengthen support for small and medium-sized enterprises and business restructuring support, not just the mere supply of funds.
JBA chairman notes the rise in interest rates, with newly issued 10-year JGB yields above 3%, reflecting economic growth and an exit from deflation.
