Yen Soars on Rising Rate Hike Bets, Fed Decision Looms

The Japanese yen has seen a significant rally on Thursday after a sudden burst higher in the previous session, with markets attributing it to rising bets on Bank of Japan rate hikes rather than intervention by Japanese authorities.

The yen rose almost 1.5 percent to a high of 156.36 per dollar, its strongest level in a month, extending its 0.9 percent jump overnight.

Citi noted that the recent comments from Bank of Japan board member Hajime Takata reintroduce the idea of an expedited rate hike trajectory, with markets taking his remarks 'more seriously'.

The yen's strength has been broad-based, with the euro sliding over 1 percent to 181.62 against the Japanese currency.