The Japanese yen surged above the 150-per-U.S. dollar mark in Tokyo's foreign exchange market on Thursday, reaching its highest level since early December before slightly retreating during Friday's midday trading. The yen's recent rebound is largely attributed to growing expectations that the Bank of Japan (BOJ) may raise interest rates further. A member of the BOJ's policy board suggested this week that additional rate hikes could be forthcoming, fueling market speculation and driving the yen's appreciation. Simultaneously, Japan's 10-year government bond yields have climbed to their highest levels since November 2009, signaling a broader shift in the country's long-term interest rate outlook. The yen's gains also coincide with the U.S. Federal Reserve's announcement that it is considering pausing its quantitative tightening program. This has heightened expectations of a narrowing interest rate differential between the United States and Japan, further boosting the yen. However, the yen's strengthening brings mixed implications for Japan's economy. While it helps alleviate some of the country's imported inflationary pressures, it also impacts the profitability of Japan's export-oriented companies. The Nikkei 225 opened lower on Friday, led by declines in key sectors such as automobiles, steel, and machinery. As the yen strengthens, Japanese goods become more expensive on global markets, reducing the competitiveness of major export industries, including automobiles, electronics, and machinery. Moreover, the yen's appreciation could discourage foreign tourism to Japan, as a stronger currency makes travel to the country more expensive. This may result in reduced tourism revenue, affecting sectors such as hospitality, retail, and restaurants. On the domestic front, Japan's consumer price index (CPI) for January, released Friday by the Ministry of Internal Affairs and Communications, showed a 3.2 percent year-on-year increase, excluding fresh food. This has continued the trend of persistent inflationary pressures. With more than a month until the next BOJ policy meeting, market speculation will likely further drive yen fluctuations in the coming weeks. SHOTLIST: FILE: Tokyo, Japan - May 30-31, 2023 1. Various of building exterior, sign of Tokyo Stock Exchange; FILE: Tokyo, Japan - Date Unknown 2. Various of stockbrokers working on computers; FILE: Tokyo, Japan - January 2025 3. Various of employees, sign of Japan Exchange Group (JPX); Tokyo, Japan - Jan 24, 2025 4. Building of Bank of Japan; FILE: Tokyo, Japan - January 2025 5. Various of building, sign of Bank of Japan; traffic; pedestrians; 6. Japanese yen banknotes going through counting machine; FILE: Tokyo, Japan - Date Unknown 7. Japanese yen banknotes on counter; 8. Various of Japanese yen banknotes going through counting machine; FILE: USA - Exact Location and Date Unknown 9. Various of U.S. dollar banknotes being printed; 10. U.S. dollar banknotes; FILE: Tokyo, Japan - January 2025 11. Various of products, price tags, customers in supermarket; Tokyo, Japan - Jan 24, 2025 12. Various of pedestrians, traffic. [Restrictions: No access Chinese mainland]