Yen Hits New Low as Dollar Rises on Safe-Haven Demand and US Debt Concerns

The Japanese yen continues to weaken against the dollar, breaching the 159 per dollar mark on Tuesday as investors seek safe-haven assets due to rising global tensions.

However, concerns over a potential US debt crisis have tempered the greenback's gains, with market participants questioning the effectiveness of the expanded debt buyback plan announced by the US Treasury Department.

Domestically, former Bank of Japan board member Seiji Adachi believes that the central bank will raise interest rates next month and potentially again in January to combat rising import-driven inflation. According to Adachi, keeping rates low could reignite a yen selloff and accelerate price increases.

The markets are pricing in an around 80% probability of a 25 basis point rate hike by the BOJ next month, up from about 23% before the central bank's July meeting.