The dollar hit a fresh seven-month low of ¥128.25 on Friday in Tokyo as data showing slowing inflation in the United States and a rise in the long-term Japanese government bond yield spurred dollar selling and yen buying.
On the bond market, the yield on 10-year Japanese government bonds rose to 0.545%, its highest since June 2015, climbing above the higher end of the trading band the Bank of Japan decided to allow in its December policy meeting for the first time, in the market's most direct challenge yet to decades of ultraeasy monetary policy.
With speculation swirling that the BOJ's policy of yield curve control (YCC) could be revised, or even abandoned, as early as next week, investors were rushing for the exits.