Yen Suffers as Hawkish BoJ Comments Fail to Offset Higher US Yields

The Japanese Yen continued its downward trend against the US Dollar on Thursday, as higher US Treasury yields offset the impact of hawkish comments from the Bank of Japan. The USD/JPY pair rose above 158.00, nearing its one-month high just above 159.00.

The BoJ's Summary of Opinions showed that some policymakers are calling for a steeper monetary tightening cycle to combat inflation, which is nearing the 2% target. However, this had little impact on the Yen, as US Treasury yields rose to fresh highs due to global bond sell-offs triggered by Middle East conflict and energy shocks.

Analysts at Societe Generale note that the August US inflation report showed mixed signals, with softer core goods inflation masking a reacceleration in core services and super-core inflation. They conclude that 'a pause in October remains possible, but an October hike remains on the table pending September CPI and PPI data.'

The soft US Personal Consumption Expenditures (PCE) Price Index report showed that inflation rose less than expected in September, while August's data was revised lower. However, this had little impact on the US Dollar.