The Japanese Yen (JPY) strengthened against the US Dollar (USD) on Thursday as higher Japanese Government Bond (JGB) yields spilled into currency markets, OCBC strategists said. USD/JPY moved lower as investors reassessed the interest-rate differential between Japan and the United States. Market speculation about possible policy adjustments by the Bank of Japan (BoJ), which has maintained an ultra-loose monetary stance, has pushed JGB yields higher and increased the yen’s appeal. The dollar also faces headwinds from US economic data and expectations for Federal Reserve policy. A firmer yen could make the carry trade (borrowing in a low-yielding currency to buy higher-yielding assets) less profitable. Traders are watching JGB yields, BoJ communications, US data, global risk sentiment and possible intervention or other policy signals from Japanese authorities. The move’s durability will depend on those factors.