BOJ Rate Hike Threat Sends Yen Plummeting Below 158
The Japanese yen has fallen below its level of four weeks ago, reaching a low of 158. This drop is largely attributed to the increasing likelihood of a Bank of Japan (BOJ) rate hike at its September 17-18 meeting.
OIS pricing now suggests that there's an 84% chance of a rate hike in September, with a cumulative tightening of around 96.5 basis points over the next 12 months.
BOJ board member Hajime Takata recently referred to 2026 as a 'regime change' in policy, suggesting that rate hikes should become more data-dependent and nimble rather than following a predictable pattern.
This shift has made the yen less attractive as a cheap funding currency, which could have a ripple effect on the crypto market. The strong yen may tighten leverage across various sectors, including DeFi, DEX/CEX carry trades, and token performance.