The Japanese yen has recovered from its lowest level since 1986 following reports that Bank of Japan officials are open to the possibility of implementing interest rate increases at a faster pace than economists generally anticipate.

The USD/JPY pair fell by as much as 0.3% to 162.69, retreating from its intraday peak of 163.22.

The one-week risk reversal stood at 164 basis points, compared to a two-month average of 192 basis points.