U.S. Treasury yields rise against headwinds as rate hike bets intertwine with yen strengthening

(1) Due to the rise in crude oil prices and last week's employment data exceeding expectations, which increased the probability of an interest rate hike next week, U.S. Treasury yields have moved higher. (2) Institutional analysis suggests that even if a rate hike is not expected next week, the market pricing currently reflects an almost equal probability between a rate hike and holding steady, and this pricing level is reasonable. (3) The institution still expects the Federal Reserve to implement two rate hikes in December and next March respectively, indicating that its relatively hawkish view on the policy path remains unchanged. (4) Despite the rise in yields, the U.S. dollar has weakened somewhat against a basket of currencies, mainly because the further strengthening of the yen has put pressure on the dollar. (5) The yield on the 10-year U.S. Treasury note has risen about 1.8 basis points to 4.802%. The market will subsequently focus on inflation data and the final guidance before next week's meeting.