Affected by interest rate hike expectations, Japan's two-year government bond yield rose to its highest level in 30 years.

Golden Finance reports that on March 26, due to market expectations that the Bank of Japan will raise interest rates soon, the yield on Japan’s 2-year government bonds rose to the highest level since 1996. The 2-year Japanese government bond yield, which is sensitive to monetary policy expectations, increased by 1 basis point to 1.315%, surpassing the previous high of 1.31% reached last month. The 10-year Japanese government bond yield rose by 2 basis points to 2.270%. Market expectations that the outbreak of conflict in Iran will lead to rising oil prices and inflation shocks have increased. Central banks around the world have issued warnings about ongoing price pressures, pushing up short-term yields, and traders have largely eliminated expectations of the Federal Reserve easing policy this year. Rising oil prices also put pressure on the yen, further fueling market expectations that the Bank of Japan may need to continue tightening monetary policy. Overnight index swap data shows that the market prices a 64% chance that the Bank of Japan will take action in April. (Jin10)