Yen Weakens Against Dollar Amid Rising Oil Prices and Interest Rate Hopes
The Japanese yen has weakened against the US dollar for the second consecutive session, falling to levels around 155 per dollar. This decline is attributed to a strengthening dollar ahead of an expected interest rate hike by the Federal Reserve this week.
The yen is also facing pressure from rising oil prices, which increases import costs for Japan's economy. Despite this, the Japanese currency remains near seven-month highs due to expectations of more aggressive monetary tightening by the Bank of Japan and signs of increased asset repatriation by domestic investors.
The BOJ is widely expected to raise its policy rate to 1.25% on Friday, its highest level since April 1995, in response to persistent upside risks to inflation. Markets are also watching for guidance from the BOJ on the potential for another rate hike later this year.