Yen holds gains as traders price BOJ rate hikes for September
The yen traded around 156 per dollar after gaining more than 2% last week, as expectations grew for Bank of Japan rate hikes this month. Adviser Takuji Aida said hikes are likely in September and another by January.
The Japanese yen traded around 156 per dollar on Monday after rising more than 2% last week, with traders increasingly expecting the Bank of Japan to raise interest rates this month. Takuji Aida, an economic adviser to Prime Minister Sanae Takaichi, said the central bank is likely to hike rates in September and deliver another increase by January next year. The remarks suggest growing recognition within the Takaichi administration, which has previously taken a dovish stance, that further BOJ hikes may be needed to curb excessive yen weakness.
The currency also drew support from the unwinding of carry trades, expectations of capital repatriation and rising political pressure from the US. 6 billion in August after Tokyo’s largest-ever yen-buying intervention. Authorities spent about $99 billion between July 30 and August 26 to contain persistent weakness in the currency.