Yen strengthens to 5-month high against dollar; Japan 10 year yield at highest level since 2008 on BoJ rate hike bets

The Japanese yen is hovering around a five month high against the US dollar tracking a sustained weakness in the American currency amid worries of potential economic fallout amid trade tensions induced by US President Donald Trump's tariffs. Besides, hawkish BoJ amid elevated wage growth and inflation are keeping the benchmark government bond yields at their highest level since 2008. Many of Japan's biggest companies have met union demands for substantial wage hikes for a third consecutive year, seeking to help workers cope with inflation and retain staff amid labour shortages. This is expected to drive inflation and has led bond yields to a high of 1.575%, supporting a path of continued gradual hikes from the BOJ. USDJPY pair were seen quoting at 148.22, the pair has last witnessed in October last year.

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