For consumers, the increased bond yields could eventually mean higher rates for home mortgages, which have already been rising in recent weeks.
Genuine reflation would also increase bond yields, however, partly offsetting those higher profits.With or without a merger, Japan's banks are a long way from turning retail banking into a solution to low profitability.
And, harder to quantify but just as real, there are losses from uncertainty and increased bond yields in other vulnerable countries that will follow from the demonstration that the euro really can be left.What might this mean in numbers?
We saw growth increasing, bond [yields] going up and the market going down another 10%–at which point we would have come back in".
The markets would see them coming and increase bond yields accordingly.Indeed the current sovereign-debt jitters may be a sign that creditors are starting to assert themselves again, and demanding higher yields from less prudent governments.
The economy has stagnated, risk aversion has increased, government bond yields have plunged, the budget deficit is out of control, government debt has been downgraded, deleveraging is rife and long-term unemployment has soared.
Now those debt costs are rising with every basis point increase in bond yields.
For Japan, only a small increase in bond yields would make the government's fiscal position disastrous.
Meanwhile, stocks ended mostly flat on Monday, raising questions about whether the increase in bond yields is dampening the recent rally in the stock market.
For consumers, the increase in bond yields could mean higher rates for home mortgages, which have already been rising in recent weeks.
