Yen Weakens as Carry Traders Keep Betting on Wide US-Japan Rate Gap

The yen has weakened against the dollar in Asia, reaching levels around 157.47 per dollar.

This is due to traders continuing to bet on a wide interest-rate gap between the US and Japan, which allows for carry trades.

Currency moves often come down to incentives, with investors borrowing cheaply in yen, swapping into dollars, and earning higher yields as long as exchange rates don't move against them too quickly.

The market focus is on the roughly 275-basis-point gap between US and Japanese policy rates, which keeps pressure on the yen.