(Bloomberg) -- Japan’s two-year bond yield climbed to the highest level since 2011 amid growing speculation the central bank will abandon its negative-interest-rate policy in coming months.

The yield rose 1 basis point to 0.165% after government data showed inflation slowed less than economists estimated last month. Overnight-indexed swaps indicated market bets that the Bank of Japan is certain to abolish its subzero rate policy by June.

Speculation of a near-term BOJ move has grown since Deputy Governor Shinichi Uchida discussed earlier this month policy options after negative rates are ended. Governor Kazuo Ueda also said last week that a virtuous economic cycle will strengthen, referring to rising inflation accompanied by higher wages and employment, in another signal that policy normalization is coming. 

Investor appetite for Japan’s short-term debt will be tested on Thursday when the Ministry of Finance auctions ¥2.9 trillion ($19.3 billion) of new March 2026 notes.

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