US, Japanese Bond Yields Plummet Amid Rate Hike Expectations

Bond yields in the US and Japan dropped on Thursday, providing relief to markets battered by inflation concerns and policy uncertainty.

The probability of a 25-basis-point rate hike by the Federal Reserve has increased to around 68-73% from 37% just last week, according to CME Group's FedWatch tool.

This rise in expectations is tempered by comments from Federal Reserve Bank of New York President John Williams, who said that rising long-term bond yields are a reflection of a solid economy and that he wants to see more data before deciding on rates.