Yen Surges to Four-Year High as Investors Bet on BoJ Rate Hike
The Japanese yen continued its rally on Tuesday, reaching a four-year high against the US dollar as investors bet on an interest rate hike by the Bank of Japan. The currency has climbed over 4% in recent days, with some analysts predicting back-to-back hikes to combat surging inflation.
Monday's gains were partly due to thin liquidity in US markets, which were closed for a holiday. However, the yen's surge was also driven by expectations of a rate hike by the BoJ, with investors looking ahead to key consumer price data on Friday that could influence the Federal Reserve's decision-making process.
The strong yen is having an impact on equity markets, with exporters in Japan struggling due to its appreciation. However, tech firms are bucking this trend, with South Korean chipmakers SK hynix and Samsung leading the way with gains of 4% and 2.5%, respectively.