Japanese Yen Strengthens Against Major Currencies

The Japanese Yen has strengthened across the board against major currencies, including the Pound Sterling. At the time of writing, GBP/JPY trades around 216.40, retreating from an intraday high near 216.85.

Japanese authorities have intervened in the foreign exchange market to support the Yen after USD/JPY briefly moved above the psychologically important 160.00 mark. Finance Ministry data shows that Japan spent a record ¥15.4 trillion, around $96.5 billion, supporting the Yen between July 30 and August 26.

OCBC FX strategists note that a September rate hike by the Bank of Japan (BoJ) could break from its current pattern in the tightening cycle, where rate increases have typically come about every six months. However, they caution that even with this move, it will be difficult for the BoJ to out-hawk market expectations.