The yen rose to its highest level in nearly three weeks following reports that the Bank of Japan may impose a cap on government bond yields as the central bank meets for its policy meeting.



Policymakers are considering allowing the yield on 10-year government bonds to rise above 1%, the Nikkei reported on Monday, but did not specify where it got that information. After the news broke, it reached about 148.81 per dollar, its strongest intraday level since Oct. 11.

If the central bank maintains its current policy on bond yields, known as yield curve control, the Japanese yen could lose value due to speculators. However, major changes could further depreciate the Japanese yen and jeopardize its goal of achieving stable inflation.

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