Yen Surges to Seven-Month High on BOJ Rate Hike Bets

The yen strengthened against the US dollar on Tuesday, reaching a fresh seven-month high as investors increasingly bet that the Bank of Japan will raise interest rates later this month.

This move comes after an upward revision to Japan's second-quarter economic growth and a rise in real wages in July reinforced expectations of accelerated monetary tightening.

Japan's economy grew at an annualized 1.4% in the April-June quarter, up from an initial 1.1% estimate, while business spending fell less than previously reported.

Markets now price a near-fully expected 25-basis-point increase to 1.25%, with Prime Minister Sanae Takaichi's economic adviser Takuji Aida also forecasting a September hike and further increases thereafter.