Yen Stabilizes at 160 Amid BOJ Rate Hike Expectations

The Japanese yen has been trading near 160 to the US dollar on Tuesday (1/9), after US Treasury Secretary Scott Bessent urged the Bank of Japan (BOJ) to raise interest rates in September.

Bessent's comments helped support the yen, saying that he has information not available to the market and believes the Japanese government and BOJ will take steps to strengthen the currency.

The markets are pricing in a 73% chance of a BOJ rate hike in September, but analysts say a one-off increase would not be enough to drive a sustained yen recovery.

The yen is under pressure from rising US Treasury yields and oil prices. Brent crude has pushed above USD 91 a barrel, while the latest attacks in the Middle East have driven up expectations of further military action.