Yen Stabilises Amid Rising Hopes for Early BOJ Rate Hike

The yen has strengthened following a joint US-Japan intervention on Friday, which has led investors to increase their bets on an early Bank of Japan interest rate hike.

The five-year bond yield rose to a record 2.050%, and the two-year yield climbed to its highest level since May 1995, reflecting growing conviction that a rate hike is drawing closer.

Strategists say the joint intervention has raised the bar for what Japan needs to do to keep the yen supported, with Tokyo now under pressure to reinforce the currency with fundamentals, such as monetary policy, rather than relying on intervention alone.