On 7 September, the yen briefly strengthened to the low ¥154s per dollar in the foreign exchange market. The move was driven by expectations of a narrowing US-Japan interest rate gap and a Bank of Japan rate hike, with the yen strengthening to around ¥155.55 per dollar in the afternoon.
In the foreign exchange market on 7 September, the yen briefly reached the low ¥154s against the dollar, its strongest level in about six months. Market participants tilted toward yen buying in thin trading, and the yen also strengthened against the euro.
As of 5 p.m., the yen was around ¥155.55 per dollar, up 74 sen from the previous Friday, while the euro was around ¥180.80, down about 80 sen against the yen.
The move was driven by yen buying and dollar selling amid expectations of a narrowing US-Japan interest rate gap. Expectations of an additional Bank of Japan rate hike remained strong in the market, while developments in the United States also supported the yen.
Remarks by the US Treasury secretary fueled expectations that the Bank of Japan could accelerate the pace of rate hikes, while the retreat in expectations for an early Federal Reserve rate hike also affected the currency's movements.