Short Japanese Bonds Fall as Market Bets on BOJ Rate Hike

Two-year Japanese government bond yields rose 1.5 basis points to 0.155% on Tuesday as investors priced in an expected Bank of Japan rate hike. Longer-dated JGBs gained, flattening the yield curve. Short-term bonds are most sensitive to policy-rate shifts, so the sell-off there signals the market expects higher rates soon.