While Prime Minister Shinzo Abe piled pressure on the Bank of Japan to weaken the yen last week, the Federal Reserve struck the first blow against the currency.

A signal from Fed board members that they may end bond purchases in 2013 helped drive the yen to a 2½-year low of 88.41 per dollar on Jan. 4, still 15 percent stronger than its decade average. The extra yield on 10-year Treasuries instead of similar-maturity Japanese government bonds reached 1.13 percentage points last week, the most in nine months, attracting funds into dollar assets.

“With a possible pickup in the U.S. economy, the dollar is more likely to rise than the yen,” said Jun Kawakami, a market economist at Mizuho Securities Co., one of the 24 primary dealers obliged to bid at Japan's debt sales. “While there's a good chance that the Fed will reduce bond purchases as early as this year, there is absolutely no exit strategy in sight for the BOJ, creating a contrast between their policies.”