Japan Financial Services Agency publishes Finance Minister Katayama’s remarks on long-term rate moves, Middle East risks and gasoline subsidy costs

The Japan Financial Services Agency published a summary of Finance Minister Katayama’s post-Cabinet press conference, covering market conditions after Japan’s long-term interest rate reached 2.4% and the government’s approach to heightened uncertainty linked to the Middle East. Katayama declined to comment on the level of interest rates, while pointing to ongoing monitoring of potential spillovers to markets. He referenced the March 30 meeting of G7 finance ministers and central bank governors, which shared a view that the Middle East situation and oil price volatility could have significant effects across energy markets, the global economy, and financial and foreign exchange markets, and noted coordination under the G7 joint statement with readiness to act if needed. On fuel prices, he described the restarted fuel price support scheme operating since the second half of March, initially bridging a gap between JPY 200 and JPY 170, with retail prices now in the JPY 150 range at many outlets and weekly support at times covering a difference of around JPY 48 to JPY 49, while saying volatility in West Texas Intermediate and futures prices made near-term cost estimates difficult. Katayama said the government expects the overall subsidy envelope to be sufficient through year-end and indicated the G7 could hold additional online discussions ahead of his trip to Washington.