Affected by Rate Hike Expectations, Japan's Two-Year Government Bond Yield Rises to 30-Year High

BlockBeats News, March 26th. Due to market expectations of a recent interest rate hike by the Bank of Japan, the yield on Japan's two-year government bonds rose to its highest level since 1996. The two-year government bond yield in Japan, which is sensitive to monetary policy expectations, rose 1 basis point to 1.315% on Thursday, surpassing the previous high of 1.31% reached last month. The 10-year JGB yield rose 2 basis points to 2.270%. The market expects that the rise in oil prices following the Iran conflict will trigger inflationary pressures.

Central banks around the world have issued warnings about sustained price pressures, pushing up short-term yields, and traders have largely eliminated expectations of further policy easing by the Fed this year. The rise in oil prices has also put pressure on the yen, further increasing market expectations that the Bank of Japan may need to continue tightening its monetary policy. Overnight index swap data shows that the market anticipates a 64% probability of the Bank of Japan taking action in April. (FX678)