Yen Surges to Six-Month High Amid Expectations of Narrowing Interest-Rate Gap

The Japanese yen has strengthened to around 152 against the US dollar, reaching its strongest level in about six months. This surge comes after the currency gained nearly 7 yen over roughly one week as investors focused on prospects for a narrowing interest-rate gap between Japan and the United States.

The buying of the Japanese currency remained dominant in the foreign exchange market, pushing the yen briefly into the 152 range against the dollar. The move came as expectations for further interest-rate increases by the US Federal Reserve eased somewhat, while speculation grew that the Bank of Japan could accelerate its rate hikes.

Finance Minister Satsuki Katayama renewed a warning against speculative currency moves at a news conference on September 8. He emphasized that the government would continue working to maintain orderly foreign exchange markets and signaled its readiness to respond to excessive speculative movements.