Yen Soars on Hawkish Rate Hike Bets Ahead of US Payrolls

The Japanese yen has surged against the US dollar, putting it on track for its strongest week in over a month. The currency strengthened to as much as 155.25 per dollar in Asia trade before retreating to 156.28, down 0.3%. This marks a more than 2% weekly gain since late July, when Japan and the US conducted a rare joint intervention to halt a slide in the yen.

Analysts say the sudden jump in the yen reflects growing expectations that the Bank of Japan could be more hawkish than previously expected when it meets on September 17-18. This has led to increased bets on a rate hike, with some forecasting the dollar to fall to a 142-146 range against the Japanese currency.

The nonfarm payrolls report is due later today, but Federal Reserve Chair Kevin Warsh has downplayed recent softness in private-sector growth. Next week's consumer price data may carry more weight for markets and the dollar than Friday's employment report, according to MUFG currency strategist Lee Hardman.