Market expectations for an early Bank of Japan (BOJ) rate hike are intensifying, putting pressure on short-term Japanese government bonds. The 5-year Japanese government bond yield rose to 2.12%, reaching a new historical high, while the 2-year yield also hit 1.645%, the highest level in 31 years. Investors currently anticipate a nearly 60% probability of a 25-basis-point rate hike by the Bank of Japan (BOJ) at its September meeting.