BOJ Hawkish Shift Sends Yen Soaring Against Dollar

The Japanese yen has been rallying sharply against the dollar on Thursday, with the USD/JPY pair sliding 0.7% to 157.6 yen.

This sudden shift in market expectations comes after BOJ Governor Kazuo Ueda hinted that the central bank will discuss higher rates and inflation when it meets in mid-September.

Markets have been betting on a rate hike, especially with the US Treasury Secretary Scott Bessent meeting with Finance Minister Satsuki Katayama to coordinate efforts for 'orderly' yen moves.

The hawkish tone of the BOJ was further reinforced by Governor Ueda's statement that policymakers need to pay greater attention to upside price risks when conducting monetary policy.