Yen Surges Against Dollar as BOJ Hints at Rate Hikes
The Japanese yen has made significant gains against the US dollar after a rare joint intervention by the US and Japan at the end of July. The intervention had helped push the yen up to as high as 155.21 per dollar, but it later surrendered some gains and dropped back down to around 160.39. On Wednesday, the yen rose sharply again, reaching 158.92 per dollar, a gain of 0.79%.
According to Chris Scicluna, head of economic research at Daiwa Capital Markets Europe, the current move in the dollar/yen exchange rate could be a 'rate check' rather than an intervention attempt. This means that governments or central banks may ask financial institutions for quotes on exchange rates without actually buying or selling.
The Bank of Japan (BOJ) has signaled a strong chance of interest rate hikes, with hawkish comments from BOJ Governor Kazuo Ueda and board member Hajime Takata. US Treasury Secretary Scott Bessent also voiced support for 'decisive' monetary steps to combat yen weakness in a meeting with Ueda.