Yen Surges to Seven-Month High Amid Growing Bets for BOJ Rate Hike

The Japanese yen has climbed to a seven-month high against the U.S. dollar after traders unwound short positions amid growing bets of a Bank of Japan interest-rate hike.

The gains added to the yen's 1.2% jump during Monday's thin session, with the Japanese currency now having firmed roughly 4.5% from around 160 yen per dollar early last week.

Traders and analysts said a slew of factors are driving the sea change for the currency, including bets on a faster pace of Bank of Japan tightening, potential repatriation by Japanese investors, and the unwinding of carry trades.