Japan Awaits Two-Year Bond Auction Amid Growing Rate Hike Fears

Investors are on tenterhooks ahead of Japan’s two-year government bond auction on Thursday, amid speculation that the Bank of Japan may need to raise interest rates more aggressively to rein in inflation and support the yen.

The yield for the tenor fell 1.5 basis points to 1.085% in morning Tokyo trading, while yields for the 10-year bond are down 3 basis points. Those for longer tenors all dropped by as much as 4.5 basis points.