Yen Surges to Seven-Month High Amid Bank of Japan Hike Bets

The Japanese yen has reached a new seven-month high against the US dollar, breaking through levels reached during Japan's July intervention. The currency strengthened to as much as 153.53 per dollar in morning trading on Tuesday.

This comes amid growing bets of a Bank of Japan interest-rate hike and potential for Japanese investors to repatriate their funds, which are driving a 'sea change' for the yen. According to Tony Sycamore, market analyst at IG, the drop looks like a sharp unwind of yen shorts after the pair broke below critical supports.

The dollar index, which measures the greenback against a basket of currencies, was slightly weaker at 98.83 due to yen strength. The euro and sterling were both 0.06% stronger as a result, last trading at US$1.1628 and US$1.3549, respectively.