BOJ Rate Hike Bets Fuel Rise in Japanese Bond Yields

The Japanese government bond (JGB) yields rose on Wednesday as traders increasingly expected the Bank of Japan to raise rates next month.

The benchmark 10-year JGB yield rose 4.5 basis points to 2.850%, while the 5-year yield reached a record high at 2.110%.

Traders are pricing in a 78% chance of a September rate hike, up from 66% on Monday afternoon.

The shift follows recent Japan-U.S. joint currency intervention and a hawkish tone in the BOJ's July meeting summary of opinions.