Two-Year JGB Yield Hits 0.155% as Investors Price In BOJ Rate Hike

Short-dated Japanese government bonds fell on Tuesday as investors positioned for an expected Bank of Japan rate hike. The two-year yield rose 1.5 basis points to 0.155%, while longer-dated JGBs gained, flattening the yield curve. Short-dated paper is most sensitive to policy-rate expectations; the sell-off there signals the market sees higher rates coming.