Yen firms as Asian stocks slip on rate-hike signals

Asian markets wavered Monday as the yen strengthened after Bank of Japan Governor Kazuo Ueda hinted the central bank may consider a rate hike at its upcoming meeting. His comments pushed the yen to 155.47 per dollar, sent the Nikkei down more than 1.5%, and drove two-year Japanese bond yields to their highest level since 2008.

Investors have been closely watching Japan amid uncertainty over fiscal policy and the timing of further policy tightening. Analysts noted that while Japan is slowly moving away from ultra-easy monetary policy, wide rate gaps with the United States may keep the yen from staging a lasting recovery.

After a strong November, global risk appetite softened. U.S. futures declined, bitcoin and ether dropped more than 5%, and broader Asian markets mostly dipped, though Hong Kong’s Hang Seng gained over 1% on renewed hopes for Chinese stimulus. MSCI’s Asia-Pacific index edged slightly higher and remains on track for its best annual performance since 2017.

Markets now look to upcoming U.S. economic data and comments from Federal Reserve Chair Jerome Powell, with traders currently pricing in a high possibility of a rate cut next week. Attention is also on holiday spending after record online Black Friday sales.

Oil prices rose as OPEC+ opted to maintain current production levels for early 2026, with Brent crude around $63 and U.S. WTI near $59.