Japan’s currency and bonds came under pressure yesterday as investors bet the US and Japan would raise interest rates following the Jackson Hole meeting. The yen briefly weakened past ¥160 a dollar, while yields on short-dated and 10-year Japanese government bonds rose to their highest levels in more than three decades. The moves came after Federal Reserve chair Kevin Warsh struck a hawkish tone, saying concerning inflation figures meant the Fed’s predominant focus should be on prices, suggesting a potential rate increase next month.

The yen’s level has been closely watched since Tokyo spent a record $96.5bn in July and August to defend the currency in cooperation with Washington. It has lost more than half the gains made after the intervention. The market now places the probability of the BoJ raising interest rates next month at more than 90 per cent.

Traders said persistent inflation and pressure on the central bank to help support the yen had significantly accelerated its rate-rise plan. India’s economy grew faster than expected in the quarter that ended in June despite higher energy prices and global trade disruptions, growing at 7.8 per cent compared with the central bank’s 7 per cent forecast. A South Korean court sentenced Han Hak-ja, 83, the leader of the Unification Church, to two years in prison over a bribery case involving the former first lady.

Russia’s finance minister Anton Siluanov was excluded from a family photo at the G20 summit in Asheville, North Carolina, after European objections. Trump said Americans opposing AI data centre construction want to end up backwards and poor. Honda and Nissan agreed to jointly develop the brains of next-generation vehicles to compete with Chinese rivals.