Yen Soars as Dollar Eases From Two-Week High Amid BOJ Rate Hike Speculation

The Japanese yen rose significantly against the US dollar on Wednesday after experiencing a rebound from its recent low. The yen, which had reached an all-time low of 163.98 per dollar before a joint intervention by the US and Japan in late July, climbed to as high as 155.21 afterwards but then surrendered some of its gains.

According to Chris Scicluna, head of economic research at Daiwa Capital Markets Europe, 'It's a big chunky move and it would be a convenient time for the U.S. or Japan, to at least conduct a rate check, after the Bank of Japan comments this morning.' He added that 'It is difficult to say what is behind the move in dollar/yen, but I suspect this is more likely to be a rate check than intervention to try and shift the trend as the recent intervention did not do that.'

BOJ Governor Kazuo Ueda on Tuesday signaled a strong chance of a hike this month, which was echoed by U.S. Treasury Secretary Scott Bessent's support for 'decisive' monetary steps to combat yen weakness in a meeting with Ueda.