Is the yen's surge a warning shot for global markets? | Reuters Morning Bid

The Japanese yen has surged to a seven-month high, gaining 4% in a single week due to mounting expectations that the Bank of Japan will raise interest rates. This shift is driven by robust economic data, including a five-year high in real wage growth of 2.4% and upwardly revised GDP figures, which may trigger a significant unwinding of the yen carry trade. Simultaneously, global energy markets are tightening as Brent crude nears $100 per barrel following Iranian threats of economic warfare and Houthi attacks on Saudi energy facilities. Despite these geopolitical tensions, the global economy shows signs of heating up, evidenced by record Chinese trade surpluses and copper prices hitting all-time highs. This acceleration in growth justifies rising bond yields but creates a growing tension for equity markets as they weigh strong corporate earnings against the impending impact of higher interest rates.