BoJ Hawks Fail to Lift Yen as US Yields Surge Past Highs

The Japanese Yen has continued its downward trend against the US Dollar on Thursday, despite the Bank of Japan's hawkish tone in its Summary of Opinions. The USD/JPY pair rose above 158.00 and is nearing its one-month high near 159.00.

Bank of Japan policymakers noted that Japan's economy has recovered moderately while inflation nears the 2% target. Some voices within the committee called for accelerating the monetary tightening pace or bringing interest rates to the central bank's approximate goal sooner.

However, the impact of these comments was muted by rising US Treasury yields, which reached fresh highs due to global bond sell-offs triggered by the Middle East conflict and energy shock. The uncertainty surrounding these events pushed long-term yields to their highest level in decades.

Societe Generale analysts argue that inflation revisions were modestly favorable, but growth revisions were more important. They conclude that 'a pause in October remains possible, but an October hike remains on the table pending September CPI and PPI data.'