The 2-year surged to 1.279%, the highest since 2008.

This comes as the market expects more rate hikes in Japan this year.

Nomura assigns a 60% probability to the BoJ delivering 3 rate hikes by mid-2027, pushing the policy rate from 0.75% to 1.50%, the highest since 1995.

A more hawkish scenario with 40% probability sees 4 hikes by end-2027, lifting rates to 1.75%, in line with 1993 levels.

Expect even HIGHER cost of debt in Japan.