The dollar-yen exchange rate has adjusted since the start of September, and on the 7th it fell below 155 yen per dollar for the first time since February of this year. Given that the two rounds of yen-buying intervention this year, Japan's solo intervention during Golden Week and the joint U.S.-Japan intervention toward the end of July, did not manage to push the rate below 155, the view that the market has reached a turning point is likely to gain strength. Behind the upward pressure on the yen is growing expectation that the Bank of Japan will raise interest rates, and after the joint U.S.-Japan intervention at the end of July, pressure from U.S. authorities on the BOJ and the government to accelerate rate hikes has intensified. Around the time of the G20 finance ministers and central bank governors meeting, U.S. Treasury Secretary Scott Bessent met with BOJ Governor Kazuo Ueda and stressed the importance of formulating monetary policy appropriately and communicating its content clearly. Governor Ueda also said at a press conference after the G20 that the BOJ will thoroughly discuss rate hikes at every meeting, including the next one, and in the market, after a September hike, a pace of roughly once every three months is seen as the baseline, while consecutive hikes are also being contemplated depending on the yen's moves. If an acceleration in the BOJ's pace of rate hikes materializes, it would likely bring stability to the bond market while also making the yen more prone to strengthening in response to BOJ rate hikes.
Growing BOJ rate-hike expectations push JGB yields up, so the 10Y yield rises (bond price falls).
