Yen Surges to Strongest Week Since July Intervention

The Japanese yen is experiencing its strongest week in over a month, appreciating by 2.5% as traders bet on a Bank of Japan interest rate hike at the upcoming meeting on September 17-18.

This significant gain reflects a change in market sentiment, with analysts suggesting that the sudden increase is not just a short squeeze but rather a reassessment of a more hawkish BOJ path, as markets begin to buy into the idea that Japan may continue normalising policy into 2027.

According to Masahiko Loo, senior fixed income strategist at State Street Investment Management in Tokyo, 'This feels less like a short squeeze and more like the market cautiously reassessing a more hawkish BOJ path.'