Yen Surges to Seven-Month High Amid Expectations of Bank of Japan Tightening

The yen has surged to a seven-month high against the US dollar, driven by expectations of faster Bank of Japan tightening and capital repatriation. The Japanese currency strengthened past the 155 level, breaking what was seen as a key resistance point for short-term speculators.

According to Lee Hardman, senior currency analyst at MUFG, this break has reinforced traders' bullish views on the yen: 'So far this year, when we have seen the yen strengthen following bouts of intervention, that 155 level was where dollar/yen tended to bottom out. Breaking past that level is a bullish signal and we could see further upside for the yen.'

The euro also dropped against the yen, while the US dollar fell broadly.