Yen Strengthens beyond 154 per Dollar on BOJ Rate-Hike Expectations

Tokyo, Sept. 8 (Jiji Press)–The yen has been strengthening against the dollar since the beginning of September amid speculation that the Bank of Japan will accelerate interest rate hikes. The dollar, which traded above 160 yen last Wednesday, slipped below 154 yen in Tokyo trading Tuesday morning, hitting the lowest level in about seven months. At 10 a.m. Tuesday, the greenback stood at 153.77-80 yen, down from 155.54-55 yen at 5 p.m. Monday. Since late August, U.S. Treasury Secretary Scott Bessent has urged the BOJ to raise interest rates promptly. At a meeting with BOJ Governor Kazuo Ueda on Aug. 30, the secretary expressed strong support for Japan to take decisive steps in its market and monetary policies to address the yen’s significant undervaluation. On Wednesday, BOJ policymaker Hajime Takata said that the Japanese central bank had been raising interest rates at a pace of about twice a year through 2025, but that 2026 represents the start of a new phase, hinting at the possibility of the BOJ accelerating rate hikes. The remarks triggered a sharp rise in the yen. There is also a growing view that the yen’s rise has been fueled by moves by hedge funds and other speculators to unwind yen carry trades, in which they borrow the Japanese currency at low interest rates and invest in higher-yielding assets abroad. Such unwinding moves “have been progressing since last week” as a continued correction of the yen’s weakness would lead to losses for speculative investors, a Japanese bank official said. END [Copyright The Jiji Press, Ltd.]