Mumbai, Dec. 16 -- Japanese government bonds (JGBs) are nearing the critical 2% threshold that has acted as a stiff upside barrier for the yields over last two and half decades. The 10-year JGB yield have zoomed around 30 basis points over last month to reach an 18-year high of 1.97% last week and currently hover just under that mark. Markets are expecting that the Bank of Japan (BOJ) will likely hike interest rates Friday for the first time since January, pushing them to their highest level in 30 years. Worries about a rush of issuance to pay for the new government's 21.3 trillion-yen stimulus package also weigh on the sentiments.

Published by HT Digital Content Services with permission from Capital Market....