Yen Strengthens on BoJ Hike Bets, USD Faces Pressure

The Japanese Yen (JPY) has strengthened against the US Dollar (USD), fueled by expectations of an interest rate hike from the Bank of Japan (BoJ).

The USD/JPY pair fell to around 158.80 during Asian hours on Monday, marking a second consecutive day of losses.

The BoJ's decision to raise interest rates is gaining traction, with strategist Scotiabank noting that the latest inflation data has 'added marginally to conviction' that the BoJ will tighten policy next month.

Additionally, the US Dollar is under pressure due to the Treasury Department's surprise announcement of doubling its buybacks of longer-dated government debt to curb rising bond yields.