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(Bloomberg) -- Japan’s rising bond yields will have both positive and negative effects on the economy, the nation’s finance minister said Tuesday in a comment likely aimed at easing recent market concern over higher borrowing costs.

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While the yield on 10-year government debt fell Tuesday amid global market concerns over the economic outlook, that move came after it hit a 17-year high of 1.575% on Monday.

“Higher yields will impact the economy in multiple ways,” Finance Minister Katsunobu Kato told reporters. While interest payments will rise for issuers, interest received will increase for buyers, he added.

Kato was likely trying to play down recent concerns over the upward trajectory of yields. His remarks indicate that the government isn’t only looking at rising yields with concern over the implications for how they might ramp up debt-servicing costs or cool economic activity.

The finance minister spoke a day after Prime Minister Shigeru Ishiba said that the government “will ensure thorough preparations” to guard against a sharp rise in long-term yields. Ishiba’s comment suggested heightened government concern over the recent gains.

The implications of higher interest rates are particularly acute for Japan given its high debt load. The International Monetary Fund estimates the nation’s public debt at around 233% of gross domestic product this year. Servicing Japan’s oversized debt is already expected to chew up close to a quarter of the annual budget for the year starting in April.

For many years the BOJ manipulated long-term bond yields to keep them around zero as part of its efforts to generate an inflation cycle that sparks stronger growth. Last year the central bank scrapped its control of yields and committed itself to paring back its purchases, thereby removing a ceiling on yields and allowing the market to determine pricing.

The BOJ still says it will step in if there are sharp moves in yields, but it remains unclear what scale of change would trigger action, creating uncertainty among traders of Japanese government bonds. While the central bank is legally independent from the government they are both committed to the achievement of sustained growth and stable inflation through a 2013 joint accord.