The yield on Japan's two-year government bonds reached a new high since 2008, and the Nikkei 225 index fell by 2.00% during the day.

On December 1, according to the Japan Times, Japan's two-year government bond yield rose to 1%, reaching a new high since 2008, indicating market expectations that the Bank of Japan (BOJ) will soon raise interest rates. The five-year and ten-year yields rose to 1.35% and 1.845%, respectively, and the yen appreciated by 0.4% against the dollar to 155.49. BOJ Governor Kazuo Ueda stated that he would weigh the pros and cons of raising interest rates and make a decision at the appropriate time. The market expects a 76% probability of the BOJ raising rates at the meeting on December 19, with the probability rising to over 90% for the January meeting. Meanwhile, the Japanese Ministry of Finance plans to issue more short-term government bonds to support Prime Minister Fumio Kishida's economic stimulus plan, which is expected to exert downward pressure on short-term bonds. Additionally, as of the time of writing, the Nikkei 225 index had fallen by 2.00% during the day.