BOJ Rate Hike Looms as Japanese Bond Yields Hold Near Records

Japanese government bond yields remained steady on Thursday, with the five-year yield hovering near its record high. The five-year JGB yield was flat at 2.105%, after touching a record 2.12% in the previous session.

The two-year yield, which is particularly sensitive to expectations for Bank of Japan policy rates, was also unchanged at 1.64%. This is its highest level since May 1999.

Market expectations for further monetary tightening have strengthened as the yen has weakened against the U.S. dollar in recent sessions. Investors are increasingly focused on both the timing and pace of subsequent hikes.