The spotlight in the currency market has been on the yen, which firmed to 155.55

Asian stocks dropped on Monday after a strong end to November as a bout of risk aversion gripped markets, while the yen firmed and Japanese government bond yields soared to their highest since 2008.

The spotlight in the currency market has been on the yen, which firmed to 155.55 per U.S. dollar as Bank of Japan Governor Kazuo Ueda provided the clearest signal yet that interest rate hike could be on the cards soon.

Ueda said in a speech to business leaders that the central bank would consider the “pros and cons” of raising rates at its next policy meeting in two weeks.

Hong Kong’s Hang Seng, though, gained 0.7% but mood was generally sober.

There’s no single headline driving today’s risk-off tone, said Saxo’s chief investment strategist Charu Chanana, who pointed to several pressure points, including rising JGB yields and sliding cryptocurrencies. At the same time, weak China PMIs have revived stimulus hopes, which is why Hong Kong stocks are bucking the regional decline.

Ueda’s comments strengthened the yen, pushed the Nikkei down nearly 2% and Japanese government bond yields to 17-year highs.

The two-year JGB yield, the most sensitive to the BOJ’s policy rate, added 3 basis points to 1.02%, while the yield on 10-year JGBs advanced 7 bps to 1.87%. Both yields hit their highest since June 2008.

The market has been focusing on the yen for the last few weeks, uncertain over the timing of the next interest rate hike and concerned about fiscal policies under Prime Minister Sanae Takaichi.

Traders have been wary of intervention to stem the yen’s decline in the wake of several verbal warnings from Tokyo officials.

Fred Neumann, chief Asia economist at HSBC, said Ueda’s comments suggest that the BOJ is increasingly concerned about the adverse effect of continued exchange rate depreciation on consumer spending.

He said: Even if the BOJ hikes in December, which appears more likely after Ueda’s remarks today, investors will take a close look at subsequent policy guidance. A hawkish hike in December would go a long way to helping anchor exchange rate and bond market expectations.