The yen rose to the upper ¥155 range against the dollar amid expectations of a Bank of Japan rate hike. Trading was subdued due to a U.S. market holiday, but pressure for a stronger yen is building.
In Monday's Tokyo market, the yen rose against the dollar, with the 10:00 a.m. rate at ¥155.88–155.91 per dollar, marking a stronger yen and weaker dollar than at the end of the previous week. Expectations that the Bank of Japan could accelerate the pace of rate hikes have become a focus for the market, supporting the yen.
Although a U.S. holiday limited market participation, the yen moved even amid thin trading, with expectations that domestic banks would buy dollars and market talk of yen selling and dollar buying.
The yen also rose against the euro, trading at ¥181.11–181.13 per euro as of 10:00 a.m. The euro was slightly weaker against the dollar, at $1.1617–1.1618 per euro.
Market views on the timing and pace of additional Bank of Japan rate hikes have strengthened, supporting the yen. With limited participation from overseas investors, trading was centered on domestic market participants.