Yen Surges to New Seven-Month Highs Amid BOJ Rate Hike Bets

The Japanese yen has reached new seven-month highs against the US dollar, climbing to as much as 153.53 per dollar in morning trading on Tuesday.

This represents a nearly 4% gain from around 160 yen per dollar early last week and surpasses levels seen during Japan's July intervention.

The yen's strength is attributed to several factors, including growing bets of a Bank of Japan interest-rate hike and the potential for Japanese investors to repatriate their funds, which has led to an unwind of carry trades and U.S. political pressure.

Market analyst Tony Sycamore noted that 'the drop looked more like a sharp unwind of yen shorts after the pair broke below critical supports' from around 155 levels seen in August and May.