Japan Short-Tenor Yields Rise to Decades Highs on Rate Hike Bets

Japan’s two-year government bond yield climbed to its highest level since 1996, while five-year yields hit a record, as expectations build for a near-term Bank of Japan rate hike.

The two-year rate, which is sensitive to monetary policy expectations, rose 1.5 basis points to 1.32% on Thursday, surpassing a previous high of 1.31% reached last month. The five-year yield rose as much as 2.5 basis points to 1.74%, the highest since its 2000 debut.