USD/JPY Weakens as Markets Anticipate BoJ Rate Hike

The Japanese Yen has strengthened against the US Dollar on Wednesday, with USD/JPY falling 0.1% to around 159.00.

Analysts at Scotiabank expect the Bank of Japan (BoJ) to raise its policy rates by 25 basis points to 1.25% in September, a move that has been anticipated for some time.

However, strategists note that while markets have begun to reprice the near-term policy path, the 'greater risk will center around the central bank's tone as market participants look beyond the September 18 meeting.'

The US Dollar is also under pressure ahead of the release of the United States (US) Personal Consumption Expenditure Price Index (PCE) data for July.