Euro Rises vs Yen Amid Growing Expectations of BoJ Rate Hike

The Euro (EUR) has strengthened against the Japanese Yen (JPY) on Monday, trading around 178.40 at the time of writing and up 0.12% on the day.

This comes despite growing expectations of further monetary tightening by the Bank of Japan (BoJ), which markets fully price in a 25-basis-point rate hike this week and another increase in December.

A BoJ official, Kazuyuki Masu, recently stated that underlying inflation is approaching the central bank's 2% target and that the policy rate remains below its neutral level.

This has led to expectations of a rate hike at the September meeting to address upside risks to prices, with the policy rate potentially reaching 1.25%, a level last seen in April 1995.