The yen strengthened against the dollar in the Tokyo foreign exchange market on the morning of the 8th, briefly reaching the upper ¥152 range per dollar. Market focus is on a narrowing Japan-U.S. interest-rate differential, against a backdrop of expectations for an additional Bank of Japan rate hike and developments in expectations for an early rate hike by the U.S. Federal Reserve.
The yen strengthened against the dollar in the Tokyo foreign exchange market on the morning of the 8th, briefly reaching the upper ¥152 range per dollar, its strongest level in about six months. While expectations for an additional Bank of Japan rate hike spread, expectations for an early rate hike by the U.S. Federal Reserve receded, prompting yen buying.
As of 11 a.m., the yen was up ¥2.18 from the previous day at ¥153.37–¥153.39 per dollar, while the euro was up ¥2.39 at ¥178.41–¥178.43.
At a press conference after a Cabinet meeting, Minister of Finance Katayama Satsuki (片山さつき) said regarding the yen's strengthening in the foreign exchange market, “We will maintain close communication with the U.S. Treasury and work to maintain orderly foreign exchange markets.”
Market participants said that “the differing directions of Japanese and U.S. monetary policy are in focus.” The yen briefly approached ¥164 per dollar in late July, but government and Bank of Japan yen-buying intervention, as well as coordinated intervention, had curbed its decline.