The yen strengthened against the dollar and bonds fell after Bank of Japan governor Kazuo Ueda gave one of his clearest indications yet that the central bank might raise interest rates this month.
The yen gained 0.4 per cent against the dollar on Monday to ￥155.6 and yields on rate-sensitive two-year Japanese government bonds rose 0.05 percentage points to 1 per cent, their highest level since 2008. Bond yields move inversely to prices.
“If the outlook for economic activity and prices outlined so far is realised, the bank, in accordance with improvement in economic activity and prices, will continue to raise the policy interest rate and adjust the degree of monetary accommodation,” Ueda said in a speech to business leaders in Nagoya on Monday.