Yen Stands Just 0.63 Yen Away From Intervention Levels Ahead of BOJ Meeting

The Bank of Japan's (BOJ) September meeting has global implications for carry trades, as the yen stands at 159.37 against the dollar, just 0.63 yen away from a level that triggers market intervention.

Market participants now assign a 76%, 80% probability to a rate hike by the BOJ in September, up from 24% on July 30.

The elevated dollar yields are still incentivizing investors to borrow yen and invest in assets with higher returns, but a likely rate hike in September could strengthen the yen and challenge leveraged trades financed in Japan.