JPY Surges Amid Rising JGB Yields, Hawkish Fed Remarks

The Japanese Yen (JPY) has strengthened against the US Dollar (USD) as traders remain on high alert for further intervention from Japanese authorities. The USD/JPY pair attracted sellers around 157.85 during Asian trading hours on Thursday.

Japanese Finance Minister Satsuki Katayama noted that the principles on foreign exchange established since the coordinated Japan-US intervention remain in effect, providing some support to the JPY. Meanwhile, Japan's 10-year government bond (JGB) yield climbed by 8 basis points (bps) to 3.055%, a 30-year high early on the day after US Treasury yields surged overnight.

The Bank of Japan (BoJ) raised its policy rate by 25 basis points (bps) last week to 1.25%, their highest level since 1995, with a vote of 7-2. Board members Toichiro Asada and Ayano Sato dissented, viewing this as a warning that additional hikes may be harder to implement.