Yen Surges to Seven-Month High as Traders Bet on Faster Bank of Japan Tightening

The yen surged to a seven-month high on Monday as traders reassessed their outlook on the currency, driven by bets on faster Bank of Japan tightening and expectations that Japanese investors may shift funds home.

This comes ahead of Friday's U.S. inflation data, which will help shape the Federal Reserve's view on an interest-rate hike later in the month.

The dollar slid to as low as 154.05 yen, its lowest since February, and was last down 1% on the day at 154.64.

Lee Hardman, senior currency analyst at MUFG, said breaking past the 155 level is a bullish signal for the yen, which could see further upside.