[Japan’s 2-year government bond yield is approaching 2%, and the market is increasing bets on the central bank raising interest rates] On September 28, Japan’s 2-year government bond yield was approaching the 2% mark, and investors were increasing their bets on the Bank of Japan’s further interest rate hikes. The yield on this type of government bond, which is more sensitive to monetary policy expectations, rose 4 basis points to 1.975% on Monday, hitting its highest level since 1995. Treasury bonds of other maturities were also under pressure, with the yield on the 5-year Treasury bond rising 3 basis points to 2.43%. Investors feared the central bank might lag behind in its response after Bank of Japan Governor Kazuo Ueda gave limited guidance on the pace of policy tightening. It also fuels expectations that policymakers may eventually need to raise interest rates more aggressively, especially as a hawkish Fed threatens to widen U.S.-Japan interest rate differentials.