BOJ Rate Hike Bets Fuel Japan Bond Yield Rise

Japanese government bond (JGB) yields rose on Wednesday as investors increasingly bet on a Bank of Japan rate hike in September.

The benchmark 10-year JGB yield increased by 4.5 basis points to 2.850 percent, while the 5-year yield reached a record high at 2.110 percent after rising by 2.5 basis points.

Traders are now pricing in a 78 percent chance of a September rate hike, up from 66 percent on Monday afternoon, according to Tokyo Tanshi data.

The rise in JGB yields also reflects concerns over inflation, which have been fueled by higher oil prices following reports of separate attacks on shipping in the Middle East.