The Japanese yen has fallen to 162.84 per dollar, marking its lowest level in four decades, as a sharp rise in US Treasury yields bolstered the greenback.
The move reflects a widening interest rate differential between the United States and Japan, with US bonds offering increasingly attractive returns relative to Japanese government debt.
US Treasury yields climbed significantly in the session, driving the dollar higher against major currencies.
The yield surge is being interpreted by markets as a signal that the Federal Reserve may maintain higher interest rates for longer than previously anticipated.
This repricing of rate expectations has intensified selling pressure on the yen, which remains under strain from the Bank of Japan’s accommodative monetary policy stance.
The dollar’s strength is not limited to the yen pair.