The U.S. dollar tumbled against the yen and Japanese government bond yields soared on Monday, after Bank of Japan Governor Kazuo Ueda hinted that the country’s long-running negative interest rate policy could be nearing an end.
“Once we’re convinced Japan will see sustained rises in inflation accompanied by wage growth, there are various options we can take,” Ueda reportedy said. “If we judge that Japan can achieve its inflation target even after ending negative rates, we’ll do so.” In late July, the BOJ tweaked its yield-curve control program, further loosening a cap on how high the 10-year Japanese government bond can rise. That move also triggered a jump in U.S. Treasury yields and weighed on a U.S. stock market rally. However, U.S. stock futures indicated a higher start for Wall Street on Monday.