Yen Weakens 0.35% Then Strengthens 0.5% Against Dollar as BOJ's Ueda Hints at Rate Hike

The Japanese yen experienced fluctuations in value, initially weakening by up to 0.35% as Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya discussed policy on January 14. However, following comments from BOJ Governor Kazuo Ueda on January 15, which hinted at a potential interest rate hike, the yen strengthened by 0.5% against the US dollar. Concurrently, long-term interest rates reached their highest levels in over 13 years, with rates peaking at 1.250%. The market reacted to Ueda's remarks, leading to a rise in both the yen and long-term bond yields. The two-year bond yield also reached a 16-year high of 0.7%. As of January 15, the dollar was trading at around 157 yen, reflecting the market's interpretation of Ueda's positive stance on a potential rate increase in January.