Japan Yield Curve Flattens on BOJ Hike Bets After Bond Meltdown

Japan’s shorter-maturity bond yields rose after the Bank of Japan raised its inflation outlook, while pressure on the long-end continued to ease following a sharp selloff earlier this week.

The two-year bond yield rose 2.5 basis points to 1.24%, and the five-year rate climbed 2 basis points to 1.68%. The 40-year bond yield fell 5.5 basis points to 3.94% after reaching its highest since its debut earlier this week on Prime Minister Sanae Takaichi’s election pledge to cut taxes.