BoJ Hawkish Stance Sends Yen Trading Defensively

The Japanese Yen has begun to trade defensively after its sharp late-August rally. According to Scotiabank strategists Shaun Osborne and Eric Theoret, the Bank of Japan's messaging is unequivocally hawkish ahead of a widely anticipated 25 bps hike on September 18.

This hawkish stance has caused the USD/JPY pair to edge higher, with support seen around 153 and short-term resistance above 155. Osborne and Theoret note that the yen's recent weakness is its first notable sign since the August 31 shock 3.7% rally.