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Finance Minister Masajuro Shiokawa expressed caution Friday over a surge in the yield on the key government bond.

With the yield now at the highest it has been since May 2002, the government must take steps to stem further rises, Shiokawa said.

The yield of the benchmark 10-year Japanese government bond briefly rose to 1.4 percent Friday morning.

“It’s not at a level that we must be worried about much,” Shiokawa said, “but we need to consider various measures if the rises continue in the future.”

Shiokawa said he will meet with Bank of Japan Gov. Toshihiko Fukui early next week to discuss the recent trend in financial markets. He said he will also listen to the opinions of institutional investors.

On steps to be taken to deal with further rises in JGB yields, Shiokawa said, “We must study which maturities we should lay emphasis on in issuing JGBs, and how we should guide the yields.”

The finance minister said the government may try to boost sales of JGBs targeting individual investors.

Led by large-lot buying in interdealer trading, however, the yield on the No. 251 10-year, 0.9 percent government bond ended the day at 1.050 percent, down 0.060 percentage point from the previous day’s close.

Financial Services Minister Heizo Takenaka also took a cautious stance on the surge in long-term interest rates, saying Japan must avoid falling into a situation in which long-term interest rates surge as a result of its massive fiscal deficit.

Long-term interest rates are 2.6 times higher than they were June 11, when they hit a record low of 0.43 percent amid worries over a global wave of deflation.

Takenaka said Japan “must go on a very narrow road” to fix its debt-ridden finances.

“We would like to steadily move ahead on the narrow road to develop the economy in a stable manner,” he said. “Japan must make its economy resilient to possible interest rate increases in the long and midterm perspectives.”

The comment was taken as an expression of his opposition to calls by influential Liberal Democratic Party lawmakers for a supplementary budget to spur the economy in the runup to an LDP presidential election slated for September.

Economy, Trade and Industry Minister Takeo Hiranuma said separately that the sharp rise in the yield of the benchmark 10-year bond is unlikely to have a significant impact on the Japanese economy for the time being.

The yield “used to be at an abnormally low level and therefore the current rise is in a process of returning to the previous level,” he said.

Financial institutions began dumping their bond holdings after an auction for the new benchmark issue drew lackluster demand Thursday.

JGB prices have been sliding in recent sessions as Japanese stocks have been making big gains.