Yen Holds Near 7-Month High
The Japanese yen eased toward 154 per dollar on Monday but remained close to its highest levels since February, supported by expectations for more aggressive policy tightening by the Bank of Japan, the unwinding of carry trades and signs of increased asset repatriation by domestic investors. The BOJ is widely expected to raise its policy rate to 1.25% on Friday, its highest level since April 1995, as the central bank addresses persistent upside risks to prices. Markets are also watching for BOJ guidance on the possibility of another rate hike later this year. Meanwhile, US Treasury Secretary Scott Bessent has repeatedly urged the BOJ to pursue more aggressive policy tightening to prevent excessive yen weakness. Investors also monitored developments in the Middle East as oil prices surged again following Saudi Arabia’s shutdown of the critical East-West pipeline, which bypasses the Strait of Hormuz.
The Japanese yen eased toward 154 per dollar on Monday but remained close to its highest levels since February, supported by expectations for more aggressive policy tightening by the Bank of Japan, the unwinding of carry trades and signs of increased asset repatriation by domestic investors. 25% on Friday, its highest level since April 1995, as the central bank addresses persistent upside risks to prices. Markets are also watching for BOJ guidance on the possibility of another rate hike later this year. Meanwhile, US Treasury Secretary Scott Bessent has repeatedly urged the BOJ to pursue more aggressive policy tightening to prevent excessive yen weakness.
Investors also monitored developments in the Middle East as oil prices surged again following Saudi Arabia’s shutdown of the critical East-West pipeline, which bypasses the Strait of Hormuz.