The Bank of Japan and the Finance Ministry on Wednesday warned the market about pushing up interest rates, with the BOJ chief terming the jump in long-term rates "a matter of serious concern."
Long-term interest rates have been rising since the central bank terminated its quantitative monetary easing policy on March 9. On Friday and Monday, the yield on the 10-year benchmark Japanese government bond briefly topped 1.9 percent -- a level unseen in 21 months.
BOJ Gov. Toshihiko Fukui told the House of Representatives Committee on Financial Affairs that the bond market has shown irregular movements and indicated he was not happy with long-term rate rises seen before the end of the "zero-interest-rate" policy.
While declining to comment on the daily movements or specific levels of long-term rates, Tanigaki hinted that the recent rate increases may stem from the market's recent wariness about possible credit tightening by the BOJ.
"Speculative interest rate rises are undesirable," Tanigaki told reporters. "We will continue to monitor (rate movements) carefully."
As for future monetary policy, Fukui said there is no connection between the timing of the end of the zero-interest-rate policy and the end of the process of absorbing excessive liquidity in the financial markets.