Tanigaki says rises in JGB yields 'a bit rapid'

TOKYO, Apr 16 (Reuters) Japanese Finance Minister Sadakazu Tanigaki on Sunday issued a slightly tougher warning against recent rises in long-term interest rates, saying moves were a bit sharp.

''Recent movements have been a bit rapid,'' he told reporters when asked about rising Japanese government bond yields. On Friday, Tanigaki merely said recent movements needed to be monitored carefully.

The yield on benchmark 10-year Japanese government bonds (JGBs) struck a 5-1/2-year high on Friday as a jump in 10-year U.S.

Treasury yields above 5 percent the previous day unleashed selling across global bond markets.

Speculation of an early end to the Bank of Japan's policy of pegging short-term interest rates at zero also prompted the 10-year yield to rise as high as 1.980 percent, a level not seen since September 2000.

Tanigaki said the Bank of Japan (BOJ) needed to explain its policy better amid the rise in JGB yields.

''The BOJ has said it would conduct policy carefully while keeping an eye on long-term interest rates, but I don't think the markets necessarily view it that way,'' he said.

''We need to explain, and the BOJ needs to explain that.'' The finance ministry is particularly wary of a rise in long-term interest rates as it would boost the costs of servicing its massive debt. Japan's debt stands at around 150 percent of gross domestic product, the worst among leading industrial countries.

The BOJ ended its five-year-old ''quantitative easing'' policy of flooding markets with liquidity on March 9.

A strengthening economy and rising prices have boosted speculation the BOJ may lift rates from zero soon after it mops up excess liquidity from the money market by June.

Tanigaki was speaking after attending a public ''town meeting'' on Japan's finances.

REUTERS PV RN1722