BoJ Hike Expectations Keep Yen in Consolidation Range Against US Dollar

The Japanese Yen has been trading in a tight consolidation range against the US Dollar as markets price in a potential Bank of Japan (BoJ) rate hike.

Scotiabank strategists Shaun Osborne and Eric Theoret note that the yen is quiet, with limited fundamental releases and hawkish BoJ messaging keeping expectations for a 25 bp hike at the September 18 meeting intact.

This hawkish tone has provided support to the yen through spreads, although markets are gradually pricing in the hike, which could lead to further near-term support.

The USD/JPY chart shows a flat range between support at 158.00 and resistance in the mid-159s, suggesting that movement is limited for now.