The yen surged against the US dollar to a one-month high amid market expectations that the Bank of Japan will raise interest rates soon. The yen rose to ¥155.57 on 3 September, while the probability of a rate hike at the monetary policy meeting beginning on 17 September is estimated at about 77%.
The yen rose more than 2% against the US dollar to a one-month high amid market speculation that the Bank of Japan is increasingly likely to raise interest rates soon. The latest developments reflect a sharp shift in investors’ expectations for Japanese monetary policy.
The yen rose to ¥155.57 against the US dollar on 3 September, up 0.9% from the previous day’s trading. The market assesses the probability of a Bank of Japan rate hike at the monetary policy meeting beginning on 17 September at about 77%. Comments by Board Member Takata Hajime (高田肇) suggested that the Bank of Japan should adopt a more flexible response. Citigroup viewed the comments as the strongest signal in recent years and suggested that the Bank of Japan could accelerate the pace of rate hikes.