Japan's Hawkish Turn Sends JPY Soaring

The Japanese Yen has experienced a sharp rebound in recent days, with USD/JPY falling by over 150 pips as markets react to increasingly hawkish Bank of Japan guidance and intervention speculation.

This comes after OIS pricing indicated a 25bp BoJ hike in September and roughly 44bp of tightening by year-end, making the pair highly sensitive to further official signals.

BoJ board member Hajime Takata suggested that a standard 25bp rate increase was 'not necessarily set in stone' and that back-to-back hikes could also be considered.