The factors behind the yen’s brief move into the ¥155-per-dollar range in early September included the results of long-term government bond auctions, the Bank of Japan’s hawkish stance and overseas developments.
The Ministry of Finance held auctions for 10-year JGBs on 1 September and 30-year JGBs on 3 September. The average yield on the 10-year bonds was 2.995%, with a highest accepted yield of 3.011% and a bid-to-cover ratio of 3.29x. The bid-to-cover ratio for the 30-year bonds was 3.79x. Although the auctions were viewed by some as somewhat lackluster, demand was generally stable and the JGB market remained calm.
The yen appreciated rapidly, reaching the ¥155-per-dollar range in Tokyo trading on 4 September. Against the backdrop of the Bank of Japan’s hawkish stance, expectations grew that the Japan-US interest rate differential would narrow. Domestically, Governor Ueda (植田)ʼs policy stance and remarks by Board Member Takata (高田) attracted market attention as factors supporting yen appreciation.