Yen Soars on Hawkish BoJ Bets

The Japanese Yen continues its strong run against the US Dollar, reaching near-six-month lows. This uptrend is largely due to expectations of a hawkish Bank of Japan (BoJ) interest rate hike next week.

Analysts at DBS and Commerzbank both agree that a BoJ rate hike is almost certain, with the most likely outcome being a 25-basis-point increase. This would be accompanied by guidance signaling further hikes in the future.

Despite strong US Nonfarm Payrolls data lifting hawkish Federal Reserve interest rate expectations to 61.2%, according to the CME FedWatch tool, the majority of economists polled by Reuters believe the Fed will hold rates steady next week.