Yen Rises Amid Strong Bullish Outlook, Approaches Seven-Month Peak
The Japanese yen has been gaining strength against major and minor currencies in Asian trading on Wednesday, extending its gains against the US dollar for a third consecutive day. The strong bullish outlook for the Japanese currency is supported by several positive catalysts.
One of these catalysts is the weakness of the US dollar ahead of key US inflation data, which will provide crucial clues about the likelihood of the Federal Reserve raising interest rates in September. Additionally, the Bank of Japan's hawkish stance has strengthened bets that the central bank will continue normalizing monetary policy this year.
The yen's price against the US dollar fell around 0.5% to ¥153.25, from an opening level of ¥153.97, after recording a session high of ¥153.98. This marks a second consecutive daily gain for the yen and brings it closer to its seven-month high of ¥152.89.
Market pricing suggests that there is a 99% probability of the Bank of Japan raising interest rates by 25 basis points at its September meeting. Investors are awaiting further data on inflation, unemployment, and wages in Japan to reassess their expectations.