Japan’s two-year bond yield hits 1.975%, highest since 1995

Japan’s two-year government bond yield has moved from below 1% a year ago to 1.975%, just under the 2% mark and its highest level since 1995. That puts the end of the ultra-low-rate era directly into short-term debt pricing. Overnight index swaps show roughly a 40% chance of an October Bank of Japan hike, while a 25-basis-point increase by December is fully priced. Japan’s five-year yield reached 2.43%.