Yen Selloff Triggers BOJ Rate Hike Expectations

The yen has lost around 0.9% this week to ¥159.15 per dollar, roughly halving its gains from intervention in late July and early August.

This decline mirrors a similar selloff in May when the currency fell back after official buying.

Currency traders see the ¥160 level as a potential trigger for fresh action from policymakers in Tokyo and Washington.

The Bank of Japan (BOJ) may be forced to raise interest rates at its September meeting, accelerating normalization of monetary policy, according to Mark Dowding, CIO for fixed income at RBC BlueBay Asset Management.

However, US jobs and inflation reports have reduced expectations for a September rate hike, now seen as only a 35% chance.