Japan's 40-year government bond yield has reached its highest level since 2008, hitting 2.535% in early trading on Wednesday, which is the highest in 16 years.

This increase is occurring amidst speculation about potential interest rate hikes by the Bank of Japan (BOJ) in the near future. Although the BOJ is expected to keep its benchmark rate at 0.25% during its upcoming policy meeting, the swaps market suggests a 66% chance of a quarter-percentage-point rate increase by January.

This trend reflects a broader decline in global bond markets, with the 10-year U.S. Treasury yield also surpassing 4%.