Yen Retreats Ahead of BOJ Decision Amid Rising Oil Prices and Fed Rate Hike Expectations

The yen has retreated from its seven-month high as markets await decisions from the Federal Reserve and the Bank of Japan. The USD/JPY pair rose 0.3% to 154.82, with the U.S. dollar index increasing by 0.12% to 99.60.

Investing.com's Fed Rate Monitor indicates a 92.1% probability of a rate hike on Wednesday, while markets also price in a 53.4% chance of another increase at the October meeting.

The combination of higher oil prices and Treasury yields has put pressure on currencies of oil-importing economies, with the South Korean won weakening sharply to 1,359.11 against the dollar.