Yen Hits Seven-Month High as BoJ Rate Hike Bets Gain Momentum

The Japanese yen has reached a seven-month high near 152.89 per dollar as investors increasingly bet on the Bank of Japan raising interest rates.

This move is significant because it squeezes 'borrow-yen' bets, which involve borrowing in yen at low rates and using the cash to buy higher-yielding assets elsewhere.

The setup breaks when the Bank of Japan looks more serious about tightening and the yen strengthens, making the funding cost rise and turning a profitable short-yen position into a loss.