Japan's Bond Yield Spikes as Investors Bet on BOJ Rate Hike

Japan's 10-year government bond yield climbed to around 2.89% on Thursday as investors evaluated the outlook for Bank of Japan monetary policy.

Markets are currently pricing in a high chance of a BOJ rate hike, with an estimated 87% probability of a 25 basis point increase in September to 1.25%, up from about 23% before the central bank's July meeting.

Former BOJ board member Seiji Adachi warned that keeping rates unchanged could reignite a yen selloff and accelerate import-driven inflation, predicting rate hikes next month and again as early as January.