On Wednesday, the dollar scaled new 24-year highs versus the yen. On the other hand, investors in sterling were left scratching their heads about the Bank of England’s next steps.

The dollar surged 0.48 per cent to as much as 146.6 yen, with a fifth straight session of steady gains taking it to levels not seen since August 1998. Officials have reiterated they stand ready to take appropriate steps to counter excessive currency moves, though whether they wish to defend particular levels is less clear.

The yen is particularly sensitive to the gap between the US and Japanese long-term government bond yields. The benchmark 10-year Treasury yield is trading not far from 14-year highs, just below 4 per cent, while the equivalent Japanese yield is pinned near zero.

Long-dated gilt yields climbed again, with the 20-year hitting a 14-year high a day after Bank of England Governor Andrew Bailey reiterated that the central bank would end its emergency bond-buying programme on Friday. He told pension fund managers to finish rebalancing their positions by then.

Sterling fell to a two-week low of USD 1.0925 after Bailey’s remarks, reiterated by a bank spokesman on Wednesday morning, though the currency later rebounded to stand 0.9 per cent higher at USD 1.1062.