Japanese Yen Hits Six-Month Highs Amid Steeper BoJ Hikes Expectations

The Japanese Yen has hit fresh six-month highs against the US Dollar amid hopes of steeper Bank of Japan hikes. The USD/JPY pair has breached the support area around 155.15 to hit lows near 154.00 on Monday.

Market expectations of a faster BoJ tightening path have sent the Yen rallying across the board over the last few weeks, with analysts at Danske Bank noting a marked shift in Japanese policy expectations.

Takuji Aida, economic adviser to PM Takaichi, now expects the BoJ to raise rates at its 17-18 September meeting, followed by another hike by January next year. However, he warns that a faster tightening pace could weigh on the economy.