Yen and Japanese bonds continue to retreat as verbal intervention lacking

The yen and Japanese government bonds continued to retreat Thursday as confidence failed to return, and negative sentiment snowballed, even as stocks rebounded following a decisive overnight rally in the United States.

A massive stimulus package set to be announced Friday by the new administration in Japan remains a worry, with huge numbers being bandied about and the possibility of new debt being issued to fund the stimulus becoming a real possibility. A muted official response to market weakness may have made matters worse.

In trading Thursday, the yen continued to free-fall toward ¥158 to the dollar while the 10-year yield reached a 17-year high. Bond prices move inversely to yields.