Japanese yen holds near 158.9 as BOJ hike odds rise
The Japanese yen trades little changed around 158.9 per dollar Monday as expectations for an early Bank of Japan rate hike strengthen, with September increase pricing rising to ~82% from ~23% pre-July meeting.
The Japanese yen traded little changed around 158.9 per dollar on Monday, as stronger expectations for an early Bank of Japan rate hike continued to underpin the currency.
Markets are now pricing an around 82% probability of a September rate increase, up sharply from about 23% before the BOJ’s July meeting, with the widely expected move taking the policy rate to 1.25% from 1%.
Investors are awaiting Deputy Governor Ryozo Himino’s speech on Thursday for further clues on the timing and pace of policy tightening, while recent acceleration in Japanese inflation has reinforced expectations for further normalization.
Additionally, broad US dollar weakness amid concerns over the Treasury’s expanded long-term bond buybacks added to demand for the yen.