The yield of Japanese government bonds rise as the market prepares for a possible rate hike on Friday.

On January 23, Jinshi data reported that the Japanese government bond yield rose on Thursday, as the market prepared for the possibility of a rate hike at the end of the two-day monetary policy meeting of the Central Bank of Japan this week. The market believes that there is a 95% chance of a rate hike by the Central Bank of Japan on Friday, as policymakers discussed the possibility of a rate hike last week and Trump's inauguration did not cause significant disruptions to the financial market. Many market participants expect the Central Bank of Japan to adopt a cautious and gradual approach to rate hikes in the future, with only two rate hikes expected in 2025. Ryutaro Kimura, a fixed income strategist at Anshin Investment Management, said that if the Central Bank of Japan raises interest rates, Governor Haruhiko Kuroda may also adopt a cautious tone when conveying the future path to avoid market turbulence. He said, 'If Kuroda goes against investor expectations and takes a more proactive stance on further rate hikes, the yen could still face negative surprises and upward pressure.'