Japanese government bonds fell further on Wednesday, increasing pressure on the central bank to raise its yield-curve cap and prepare for an end to its negative interest rate policy.
Market expectations that the Bank of Japan is getting closer to raising interest rates has pushed bond yields to the highest in a decade. Five-year yields climbed to levels last seen in 2013, following similar moves longer-maturity debt in recent days.
Swap rates used to hedge against or bet on bond yield shifts have also surged higher. Meanwhile, debt yields in the US that are rising even faster than those in Japan, adding to the turmoil and sparking concern that investors will demand higher rates to keep their money in Japanese bonds.
Read the full story on Bloomberg here.