BOJ Rate Hike Speculation Drives Yen Buying Amid Thin US Holiday Trading

The Japanese yen rose to its upper 155 range against the US dollar in Tokyo foreign exchange trading on Monday, driven by speculation that the Bank of Japan (BOJ) may accelerate its rate hikes. The pair traded at 155.88-91 per dollar as of 10:00 a.m., representing a 39-41 sen appreciation from the previous weekend's levels.

Market participants positioned for a narrowing of the Japan-US interest rate differential, which has been building since the prior week. Some market participants expressed caution about the trading environment due to limited overseas participation caused by the US Labor Day holiday.

The yen also rose against the euro, trading at 181.11-13 per euro as of 10:00 a.m., up 54 sen from the previous weekend's close. The BOJ rate hike speculation continues to drive market movements, with some speculating that the bank may accelerate its pace.