11:52 AM EDT, 06/21/2024 (MT Newswires) -- The Japanese yen fell sharply on Friday and was nearing levels that previously drew intervention from the Ministry of Finance after an increase in the S&P Global Composite Purchasing Managers' Index, or PMI, sent US government bond yields rallying.

USD/JPY was quoted 0.38% higher around 159.53, close to the 160.25 level that led the Ministry of Finance to intervene repeatedly in late April and early May, after the two-year US bond yield rallied five basis points to 4.74%.

Yields rallied, leading the US-Japan spread to compress and USD/JPY to ascend vertically, after a pick up in both the services and manufacturing industries led the S&P Global Composite PMI to tick higher in June.

Both the currency and bond markets overlooked a continued decline of the price indexes in each survey, which signaled a further moderation of inflation pressures during June, with input and output prices ebbing across both sectors.

These losses made the yen one of the worst-performing currencies in the G10 basket and marked a reversal of fortune for the Japanese unit, which had vyed with the US dollar for the top spot among major currencies in Asia and Europe on Friday.

The yen outperformed most major currencies previously as risk aversion in global markets weighed heavily on government bond yields in most parts except in Japan where the two-year and 10-year yields climbed throughout the session.