Market pricing in growing chance of BOJ rate hike

Falling Japanese government bond prices indicate the market is pricing in a potential interest rate hike by the Bank of Japan, The Wall Street Journal reported. In a research note, Tomohisa Fujiki of Citi Research explained that expectations for a rate hike have become more strongly reflected in market prices over the past two weeks. Fujiki added that the market is now forecasting up to a 70% probability of a rate hike at the April meeting and is also pricing in the possibility of two or more hikes by the end of the year. Currently, the 10-year Japanese government bond yield is up 2 bp to 2.400%, its highest intraday level since February 1999.