Yen Surges to Seven-Month High Amid BOJ Tightening Bets

The Japanese yen has reached a seven-month high against the US dollar, driven by bets of a faster Bank of Japan interest-rate hike and potential repatriation of funds by Japanese investors. The currency strengthened to as much as 152.89 per dollar in morning trading on Tuesday, surpassing levels reached during Japan's July intervention and hitting its strongest since February.

Khoon Goh, head of Asia research at ANZ, noted that the yen's strength triggered stop losses and momentum moves, making it a self-reinforcing trend. The next key level to watch will be 150.

The dollar index was weaker at 98.83 amid yen strength, while the euro and sterling remained largely flat. Market focus now shifts to US inflation readings this week, with traders pricing a roughly 60% chance of a Federal Reserve rate hike following Friday's stronger-than-expected nonfarm payrolls report.