Yen Surges as Global Markets Recover Ahead of US Payrolls Report

Global markets are showing signs of recovery ahead of Friday's US payrolls report. The yen surged to its biggest two-day rally since August, while Japanese government bond yields dropped from historic peaks. This comes as investors await comments from Fed Board Governor Christopher Waller and New York Fed President John Williams on the central bank's next monetary policy decision.

The dollar index fell 0.34% to 99.25 due to the yen's rise, which has gained nearly 2% in two days. Meanwhile, benchmark US 10-year yields were down 3 basis points at 4.766%, and 10-year German yields dropped by 1 bp at 3.363%. The yield on the 30-year JGB fell 8 bps to 4.085%, down from a near record high after a sale of the securities drew decent demand.

Lombard Odier chief economist Samy Chaar said that there is an interpretation about why yields are moving higher, but it might be that a key reason behind higher yields is simply higher nominal growth. He added that if demand is strong and it's keeping yields at high levels, it's a good environment for multi-asset portfolios.