The Japanese yen has enjoyed a sudden bout of gravity-defying strength, soaring more than 2% against the dollar, as whispers grow that the Bank of Japan (BoJ) might finally raise interest rates. The currency hit its highest level in a month at 155.57 on Thursday, following a 0.9% jump the previous day - because apparently, in these markets, a single rumour is enough to send currencies into a frenzy.

Global markets remain as jittery as a caffeinated squirrel, still reeling from this week's bond sell-off, which was triggered by fears that higher oil prices might reignite inflation. Investors, ever the optimists, are now frantically reassessing their interest rate expectations across major economies, with Japan suddenly in the spotlight.

The catalyst? BoJ policymaker Hajime Takata suggested the bank needs to move more "nimbly" - a word that, in central bank speak, roughly translates to "we might actually do something decisive." Nigel Green, CEO of financial adviser deVere, noted that the yen's rapid appreciation underscores the market's fragile state: "Markets this jumpy don't need a shock to move hard, a rumour is enough." Indeed, why wait for a crisis when a well-placed hint will do?

Citi chimed in, telling clients that Takata's comments were the "strongest messaging we've heard from the board" and reintroduced the idea of an expedited rate hike trajectory. The BoJ has been incrementally raising rates for two years after Japan finally shook off decades of deflation - because who needs falling prices when you can have... slightly less falling prices? - but left its main policy rate unchanged at 1% in July. Markets now see a 77% chance of a hike at the BoJ's next meeting starting on 17 September. Those odds are probably better than getting a straight answer from a politician.

Japan's vice-finance minister for international affairs, Atsushi Mimura, was characteristically thrilled, saying he was "neither satisfied nor reassured" and that policymakers "remain on a state of heightened alert." Because nothing says confidence like a government official refusing to be satisfied or reassured.

Meanwhile, the global bond sell-off intensified earlier this week after US Federal Reserve chair Kevin Warsh - a name that still confuses anyone expecting Jerome Powell - gave a speech last Friday vowing to bring inflation back to target. Warsh had previously baffled investors by ditching the Fed's "forward guidance" approach, but at the Jackson Hole conference he said if inflation didn't move toward the 2% target, the Fed would have "more to do." That's Fed-speak for "we might actually raise rates again, folks."

The dollar weakened on Thursday after Fed governor Christopher Waller hinted he prefers keeping rates steady this month, paraphrasing John Lennon: "give disinflation a chance. We can wait one meeting." A sentiment that would surely resonate with anyone waiting for a bus that never comes. The dollar dropped further against the yen, and also lost ground against the pound and euro.

The bond sell-off appeared to ease on Thursday, with 10-year UK gilt yields hovering around 5.1% in morning trading - still uncomfortably close to the 5.3% peak not seen since 2008. Because nothing says "economic stability" like yields reminiscent of the global financial crisis.