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"The largest overhang I can see in this regard is dollar-yen, where the BOJ must pivot regardless and the carry trade that has built up now amounts to nearly half a trillion dollars."

"Friday's action might best be viewed as an attempt to head off a fresh wave of yen-weakening carry trade activity, by at least ceasing to resist pressure for 10-year yields to rise above 0.5%," said Ray Attrill, head of FX strategy at National Australia Bank.

"The carry trade is going to become less profitable. You're mining the riskier a bit of the of the seam of gold," said Kit Juckes head of FX strategy at Societe Generale, who expects any yen appreciation to be gradual.

In what is known as a carry trade, investors have borrowed cheaply in yen to fund bets in higher-yielding currencies like the dollar or the Mexican peso, making money on the difference.

The carry trade - an investment strategy that takes advantage of differences in borrowing costs between countries - has provided bumper returns this year as most central banks have hiked rates, causing yields to rise, but at different paces.