Yen Surges to Six-Month High Amid BOJ Hike Bets

The Japanese yen surged to a six-month high against the US dollar on speculation about changes in the Government Pension Investment Fund's asset allocation and rising expectations for faster Bank of Japan rate hikes.

This increase in the yen's value came as a result of July wage figures and an upward revision to second-quarter GDP, which reinforced the case for the BOJ to tighten policy at its meeting next week.

The stronger currency weighed heavily on Japanese equities, with the Nikkei managing only a minuscule 0.07% gain in morning trade as yen strength offset dip-buying elsewhere in the market.