Forex
Yen Surges on Rate Hike Expectations Amid US-Japan Rift
The yen has reached a seven-month high due to expectations of faster Bank of Japan policy tightening.
US Treasury Secretary Scott Bessent said that when he makes market calls, he's effectively doing so with inside information, as the market expects the BoJ to raise its policy rate to 1.25 percent from the current 1.0 percent at its policy meeting scheduled for September 18.
The rising expectations of monetary tightening have exposed rifts between the US and Japan behind their exchange-rate stabilization efforts.
A record $79.6 billion was wiped off Japan's foreign reserves in August, down from $1.287 trillion to $1.208 trillion, highlighting the sensitive point in US-Japan financial ties.