USD/JPY is on the rise, reaching a yearly high. As the Asian session opened on Thursday, the currency pair traded higher around 150.50.
 
The USD/JPY's strength is driven by rising U.S. Treasury yields, supported by risk-off sentiment arising from geopolitical uncertainty. Israeli Prime Minister Benjamin Netanyahu's statement about a potential ground assault in Gaza, which will occur at an agreed time, has also influenced the risk-off sentiment impacting this currency pair.
 
Japanese Prime Minister Fumio Kishida emphasized that the Bank of Japan’s (BoJ) monetary policy aims for sustainable inflation, aligned with efforts to increase wages. He stressed that this approach does not conflict with the government's strategy to curb inflation.
 
BoJ has refrained from significant interest rate hikes over the past two years to stimulate long-term inflation in Japan. However, concerns remain that Japan's inflation might not reach BoJ's 2% target, posing a challenge to the central bank's goals.
 
Deputy Chief Cabinet Secretary of Japan, Murai Hideki, highlighted the importance of a stable currency reflecting economic fundamentals. He expressed disapproval of excessive foreign exchange (FX) volatility and kept silent on potential currency intervention. Hideki affirmed his commitment to take appropriate action on FX issues.
 
Investors are waiting for the release of Tokyo's Consumer Price Index (CPI) and Core CPI for October. This anticipation arises from its potential impact on the market if the Bank of Japan (BoJ) decides to adjust policies soon.
 
The U.S. Dollar Index (DXY) continues to climb, supported by positive momentum in U.S. Treasury yields. U.S. bonds are reaching their highest levels in 16 years, with the 10-year Treasury yield currently at 4.95% as of the latest update.
 
Thursday is set to release the U.S. Q3 Gross Domestic Product (GDP) figures. On Friday, the release of the Core Personal Consumption Expenditures (PCE) will provide insight into changes in prices of goods and services in the United States.
 
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Warning!
 
This analysis is based on fundamental and technical perspectives from trusted sources and does not serve as advice or a call to action. Remember that this content aims to enrich readers' knowledge. Always conduct independent research on forex information to guide your trading.
 
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