Yen Surges 2% as Global Markets Rally Ahead of Fed Rate Hike Decision

Global markets saw gains on Thursday as investors awaited US data and central banker comments that could influence expectations of a Federal Reserve rate hike this month.

The yen surged, rising nearly 2% in two days, while Japanese government bond yields slid from historic peaks, tracking a recovery in global bonds. Oil prices edged lower but remained around $95 per barrel as uncertainty persisted over renewed military strikes between the US and Iran.

Sovereign bond yields fell sharply after hitting multi-year highs last week due to concerns about tighter monetary policy and deteriorating fiscal conditions.

Money markets currently assign a 60% chance of a rate hike from the Fed this month, up from less than 40% a week ago.