Shares Are Mixed in Asia as Traders Await Data – Asia Market Wrap

Japan’s two-year yield climbed to the highest since 2011 after stronger-than-expected inflation data boosted bets the central bank will end its negative-interest-rate policy in coming months. Traders increased the probability of Bank of Japan exiting its negative rate policy by April to about 81%, up from 78% on Monday, according to swaps data. The yen strengthened.

The inflation “report is adding to speculation that the BOJ will end negative-rate policy as early as March and is serving as a selling catalyst for bonds,” said Kazuya Fujiwara, a fixed-income strategist at Mitsubishi UFJ Morgan Stanley. The data underscores persistent inflationary pressures, he said.

Japan’s two-year yield rose to its highest level since 2011 as stronger-than-expected inflation statistics increased expectations that the central bank will cease its negative-interest-rate policy in the coming months. According to swaps data, traders upped the probability of the Bank of Japan abandoning its zero rate policy by April to around 81%, up from 78% Monday. The yen has increased.

The inflation “report is adding to speculation that the BoJ will end negative-rate policy as early as March and is serving as a selling catalyst for bonds,” said Kazuya Fujiwara, a fixed-income strategist at Mitsubishi UFJ Morgan Stanley. The data highlight continued price pressures, he said.