Zhongjin: Currently, Japan's "high interest rates" basically conform to Japan's economic and inflation fundamentals.

The research report from Zhongjin Company pointed out that recently, the interest rates on Japanese government bonds have risen significantly, causing concerns among many investors. In the long term, we believe that whether interest rates are high or low needs to be considered in relation to the level of inflation. Currently, Japan's "high interest rates" basically match the country's economic and inflation fundamentals, but the recent speed of interest rate hikes has been somewhat "over-speed." This is due to 1) the Middle East geopolitical conflicts causing global inflation to rise, putting pressure on government bond interest rates; 2) the stance of high city on fiscal expansion; 3) the stance of high market on loose monetary policy. In the future, if the high city continues to pursue a policy of significant fiscal expansion and loose monetary policy, Japan's domestic economy and inflation may face stagflation risks, and there may be risks of a "three-pronged attack" on the capital market. On the other hand, if fiscal policy remains neutral and monetary policy continues to tighten, Japanese assets may stabilize, which is beneficial for the stability of global capital markets.