BoJ Hike Odds Soar to 80% as USD/JPY Traders Face ¥159.82 Resistance

The USD/JPY pair has been trading around ¥159.20 during the early European session on Wednesday, down 0.25% from its previous level. The pair had edged lower to ¥159.45 in Asian hours and held steady at ¥159.30 on the daily chart.

The yen is experiencing a strong recovery against major peers due to domestic factors rather than American influences. Overnight index swaps indicate an approximately 80% probability of a Bank of Japan rate hike as soon as the September 18 meeting, up from 50% in early August.

Despite the rising odds of a BoJ hike, the medium-term picture remains unfavorable for the currency. The yen has strengthened by 1.77% over the past month but is down 8.05% over the past twelve months.