Yen Surges as Dollar Yields Retreat Amid US Treasury Buybacks

The Japanese yen strengthened against the US dollar on Thursday, gaining nearly 1% in the previous session. This move was supported by a decline in the dollar and retreating Treasury yields, which were impacted by the US government's decision to expand its bond buyback program.

The US Treasury Department announced that it would at least double the size of liquidity-support buyback operations covering securities with maturities from 10 to 30 years. This measure aims to contain long-term borrowing costs and address concerns over market liquidity and stability.

Despite this support, the yen remains under pressure in the long term due to wide interest rate differentials, mounting fiscal concerns, and elevated energy and import costs.