Japan's two-year government bond yield is approaching the 2% threshold for the first time in three decades, reflecting growing market expectations that persistent inflation could push the Bank of Japan into a more restrictive interest-rate policy.
The two-year JGB yield, which is particularly sensitive to expectations for the Bank of Japan's policy rate, rose as high as 1.975% on Monday, its highest level since March 1995. The yield has doubled over the past 12 months and is more than six times its level at the same point in 2024.
