With the yen at a 24-year low, Tokyo stocks down the most since March and bond yields hitting their ceiling, the Bank of Japan is under duress having to defend a policy the rest of the world is quickly moving on from.
In his clearest warning yet on the yen¡¯s weakness, BOJ Gov. Haruhiko Kuroda, 77, said Monday that the recent abrupt slide of the currency is bad for the economy, while the central bank reinforced efforts to keep a lid on yields. Still, the yen fell 0.6% to ?135.19 per dollar, the lowest level since 1998.
The downward pressure on the yen and slide in Japanese government bonds was triggered by a new wave of selling in global debt markets, led by Treasurys, as investors shocked by Friday¡¯s U.S. inflation data priced in aggressive policy tightening by the Federal Reserve and sought refuge in the dollar.
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