Yen Treads Water Near 160 Amid Bets for BOJ Rate Hike

The yen held steady near the 160-per-dollar level on Tuesday after U.S. Treasury Secretary Scott Bessent called for the Bank of Japan to raise interest rates this month.

Bessent's comments, made during a gathering of G20 finance leaders, added pressure to the BOJ to act and strengthen the yen. The currency has been underperforming in recent sessions, but some analysts believe it needs more than just one rate hike to sustainably move away from 160.

U.S. President Donald Trump also weighed in on the situation, threatening further strikes against Iran after renewed attacks in the Middle East sent Brent crude futures above $91 a barrel and Treasury yields higher.

The dollar index eased to 99.37 as investors reassessed whether Fed Chairman Kevin Warsh's hawkish stance would lead to a rate hike in September. Markets are pricing in a 73% chance of a BOJ hike later this month, but analysts say the central bank needs to demonstrate a more hawkish path beyond September.