Japan's two-year bond yield hits highest since 1995 on BOJ rate-hike bets
The five-year yield also rose, with Bloomberg pointing to growing bets on further Bank of Japan rate hikes
Published
Japan's two-year government bond yield rose as much as 4 basis points to 1.975% on Monday, its highest level since 1995, Bloomberg reported. The five-year yield climbed 3 basis points to 2.43% on the same day, according to Bloomberg.
Bloomberg attributed the move to investors adding to bets on further Bank of Japan rate increases. A former Bank of Japan board member, Makoto Sakurai, said the central bank is expected to raise rates roughly once every three months, potentially reaching 2% by around June next year to address inflationary pressures, Trading Economics reported.
The move follows a broader climb in Japanese yields. On Thursday, the 10-year yield reached about 3.08%, its highest level since August 1996, tracking a surge in US Treasury yields, according to Trading Economics.
The rise also comes against a backdrop of unresolved tension over Iran. Trump rejected Iran's latest nuclear talks proposal, following weeks of New York talks Tehran had described as entering a more positive phase. Despite that progress, Iran's proposal and hardline rhetoric underscore how fragile any resolution remains, while the US has said it sees no urgency to compromise. That keeps a risk premium intact for yen-denominated assets, even as domestic rate expectations drive much of the latest move.