Growing speculation that the Bank of Japan will raise interest rates as early as this month has weakened investor demand for 10-year bonds in the busy corporate bond market, pushing up premiums on newly issued bonds, according to Jinshi. The benchmark 10-year bond yield hit 1.1% again this week, matching its highest level since 2011, as concerns about rising interest rates permeate the credit market. Credit markets have been under pressure since the Bank of Japan ended its control of the yield curve earlier this year, allowing yields to rise. "The market expects interest rates to rise, which will lead to interest rate volatility, and demand for 10-year bonds is weakening," said Kentaro Harada, chief credit analyst at Sumitomo Mitsui Nikko Securities.
