Japan's bond market signals are clear? The two-year government bond yield has broken 1% for the first time in 16 years.

Question

[Block Rhythm] The Japanese bond market has recently made a big stir - the two-year government bond yield has directly broken 1%, which is the first time since the 2008 financial crisis. The five-year yield has jumped to 1.35%, and the ten-year yield has even soared to 1.845%. The market is betting that the Bank of Japan will take action to raise interest rates.

The Japanese yen also saw a surge against the US dollar, peaking at around 155.49, with an increase of about 0.4%. The Governor of the Bank of Japan, Kazuo Ueda, seemed quite calm, stating that they would weigh the pros and cons before deciding when to take action. However, the market thinks otherwise, with a 76% probability that there will be an interest rate hike at the meeting on December 19, and this probability skyrockets to over 90% for the January meeting.

On the other hand, the Japanese Ministry of Finance intends to issue more short-term government bonds to provide funding for Prime Minister Koizumi's economic stimulus plan. After this operation, short-term bond yields are expected to come under pressure. The whole situation is quite delicate; the Central Bank wants to tighten, while the government wants to loosen. It is really hard to say how Japan will proceed in this game.

MerkleTreeHugger · Accepted Answer

The Bank of Japan is really pulling out all the stops this time, finally breaking 1... There&#39;s a 76% chance they will take action in December, and it feels like the yen is really going to rise this time.

PessimisticOracle · Answer

The Bank of Japan and the Ministry of Finance are at odds, tightening vs point shaving, this show is really exciting to watch.

ZenMiner · Answer

The Bank of Japan is really getting serious this time. The 1% mark, which hasn&#39;t been broken in 16 years, has been directly crossed. It feels like a big change is coming.

SudoRm-RfWallet/ · Answer

Is the Bank of Japan finally going to take real action? It hasn&#39;t broken 1% in 16 years; is this time serious or will it be more point shaving?

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Tightening and point shaving at the same time, Japan is really playing this combo well, haha.

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Wait, the Ministry of Finance is issuing more national bonds? Isn’t this just a left hand robbing the right hand rhythm?

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76% chance of a rate hike in December; it feels like Japan is really being pushed into a corner this time.

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What does it matter if the two-year yield breaks 1%? The key is whether the yen can stabilize.

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The Central Bank wants to tighten, while the Ministry of Finance wants to loosen; this performance is getting interesting.

MerkleMaid · Answer

The Bank of Japan finally can&#39;t sit still anymore, the 1% that hasn&#39;t been broken for 16 years has been forcefully pierced, is this for real this time?

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Wait, the Ministry of Finance is going to issue more national bonds? Isn&#39;t this just fighting with itself?

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With a 76% interest rate hike expectation, I bet the yen is going to rebound this time, those who believe will be fooled.

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It&#39;s a contradiction with the Central Bank tightening and the government point shaving, when will this contradictory nature be cured?

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It&#39;s true that it&#39;s broken 1%, but how it goes from here is still uncertain, too many unknowns.

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This situation is ridiculous, on one hand raising interest rates and on the other hand handing out money, Japan is really playing with fire.

QuorumVoter · Answer

Is the Bank of Japan finally serious? It hasn&#39;t broken 1% for 16 years, this time it looks like they mean it...

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Central Bank rate hike vs government point shaving, we&#39;ve seen this script before... Japan can&#39;t escape it either.

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Wait, a 76% probability of a rate hike? It feels like the market is betting on the Central Bank&#39;s determination.

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Short-term government bonds are being issued, is this a range-bound situation or mutual restraint...

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The yen rises slightly and can make headlines? This news is a bit weak.

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For the first time since 2008 breaking 1%, is Japan really saying goodbye to the negative interest rate era?

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The Central Bank wants to tighten while the government wants to spend money, who will win this game... quite interesting.

GasSavingMaster · Answer

The Bank of Japan is finally going to take real action, with a 76% probability of an interest rate hike; this time it&#39;s not a false alarm. Short-term debt pressure is high, but in the long run, the rebound potential of the yen will depend on future developments...