Daily Briefing · 2026-10-02

The U.S. 10-year Treasury yield surged to 5.34%, the highest level in 24 years. In response, mortgage interest rates have also risen to the low 7% range, raising concerns about increased borrowing burdens. In Japan as well, the interest rate on the long-term fixed-rate mortgage "Flat 35" updated its historical high at 3.830%. Next, geopolitical risks. Russia warned NATO of the possibility of nuclear weapons use over the Kaliningrad issue. Concerns are growing over increased defense spending by European countries and expanding market uncertainty. Meanwhile, President Putin made remarks indicating a desire to build mutually beneficial relations with Japan following the end of the Ukraine invasion, raising expectations for a recovery in trade and investment through the lifting of economic sanctions. In China, the National Defense Mobilization Law has come into effect, enabling the military use of advanced technologies such as AI, drawing attention to increased demand in defense-related industries and the impact on supply chain restructuring. Additionally, Premier Li Qiang reiterated that the Taiwan issue is an inviolable red line, and the risk of instability in trade relations continues. In the Middle East, intensifying fighting has produced over 140,000 refugees in Yemen, causing a sharp rise in humanitarian aid costs. Next, developments among domestic companies. Three regional banks in Aomori, Akita, and Iwate have begun discussions toward a business integration, with expectations of improved management efficiency and cost reductions. The company operating Don Quijote has acquired the Toys"R"Us business; while sales growth is expected through the strengthening of toy retail operations, enhancing profitability and customer acquisition strategies will be key to the turnaround. For Nidec, responding to the risk of delisting has become an important challenge for maintaining corporate value. Following the unification of beer tax rates, the industry is facing concerns over intensifying competition and worsening profitability for each company. In the labor market, demand for skilled workers is rising, and as wage increases for blue-collar positions continue, companies' costs for securing labor are increasing. In the defense sector, a joint drone venture between Germany and Ukraine has begun production at a German factory, raising expectations for expanded investment opportunities in both countries. Finally, Tokai Kisen has been ordered to suspend the use of three vessels, resulting in a financial burden from decreased operating revenue and increased repair costs.