Japanese government bond yields are cresting their highest levels in three decades.
The surge comes as investors expect Japan's central bank to hike rates in September to prevent a weaker yen from pushing up inflation. Earlier this month, Tokyo and Washington jointly intervened in the foreign-exchange market to arrest the yen's slide, the first such action since the late 1990s.
Today, the yield on the benchmark 10-year bond hit 2.930%, its highest since September 1996.
Mizuho Securities strategist Noriatsu Tanji said he expected yields to rise further if markets increase bets of a September rate hike. As of this afternoon in Tokyo, swap markets were pricing in a nearly 80% chance of Bank of Japan action next month.
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