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Japan's two-year government bond yield reached 1.746% on Monday, marking its highest level in more than 31 years.
This rise increases the cost of the yen carry trade, a strategy that has historically helped fund global risk assets, including Bitcoin (BTC).
The movement in two-year yields reflects trader expectations for the Bank of Japan (BOJ). Swap markets currently price approximately 88% odds of a rate increase in September.
The BOJ raised its policy rate to 1% in June, the highest level since 1995, with longer maturities following suit. The 10-year Japanese government bond (JGB) yield now sits near 2.93%.
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