Weekly Espresso
Traders in the swaps market have significantly increased their bets on an interest rate hike by the Bank of Japan (BOJ) at its upcoming 23-24 January meeting, with the likelihood rising to nearly 99% from 71% earlier in the week. Market expectations were bolstered by BOJ Governor Kazuo Ueda’s comments on Wednesday, suggesting a decision on rates would be made soon and expressing confidence in wage growth. Japan’s government bond yields have climbed, with the 2-year yield reaching its highest level since 2008.