BoJ Hawkishness Drives Yen Lower as Rate Hike Looms
The Japanese Yen has been trading defensively in recent days after its sharp rally late last month. Scotiabank strategists Shaun Osborne and Eric Theoret note that the USD/JPY pair is edging higher as investors adjust to a more hawkish stance from the Bank of Japan.
Osborne and Theoret highlight that the BoJ's messaging has become unequivocally hawkish ahead of its widely anticipated 25 basis points rate hike on September 18. They see support for USD/JPY around 153, with short-term resistance above 155.
The yen's recent weakness is attributed to the market pricing in a tightening of monetary policy by the BoJ. The strategists point out that the release calendar has been limited, and focus remains centered on the BoJ's messaging leading up to the September meeting.