Japan's two-year government bond yield hits highest level since 2008, Nikkei 225 Index drops 2.00% intraday

BlockBeats News, December 1, according to The Japan Times, Japan's two-year government bond yield rose to 1%, reaching a new high since 2008, indicating that the market expects the Bank of Japan (BOJ) to raise interest rates soon. The five-year and ten-year yields climbed to 1.35% and 1.845% respectively, while the yen appreciated by as much as 0.4% against the US dollar to 155.49. BOJ Governor Kazuo Ueda stated that the pros and cons of a rate hike would be weighed and a decision would be made at an appropriate time.

The market expects a 76% probability of a BOJ rate hike at the December 19 meeting, rising to over 90% for the January meeting. Meanwhile, Japan's Ministry of Finance plans to issue more short-term government bonds to support Prime Minister Sanae Takaichi's economic stimulus package, which is expected to put downward pressure on short-term government bonds.

In addition, as of press time, the Nikkei 225 Index had fallen by 2.00% during the day.