The unwinding of yen carry trades has been observed in the foreign exchange market, with expectations of faster Bank of Japan rate hikes emerging as a backdrop. The yen is approaching the upper ¥155 range per US dollar, and views are spreading that ¥158 represents a watershed level.
There is speculation that the unwinding of yen carry trades has begun in the foreign exchange market. As expectations grow that the Bank of Japan will accelerate interest-rate hikes, some market participants say speculative investors are increasingly moving to overcome losses on their yen-selling positions.
On the 3rd in U.S. Eastern Time, the yen at one point strengthened to around ¥155.30 per US dollar. The yen is also reported to have swung to the low ¥160 range on the night of 1 September.
In the market, ¥158 is being watched as a watershed level, and views are divided over whether the yen's strengthening trend will continue.