Yen surges over 2% as Bank of Japan turns hawkish

The Japanese Yen experienced its largest weekly gain since late July, driven by hawkish signals from the Bank of Japan regarding potential interest rate hikes. The shift in monetary policy and rising Japanese government bond yields have compressed the US-Japan interest rate spread, triggering a reversal in yen carry trades. This volatility is impacting global liquidity and pricing for US AI and technology growth stocks.