Yen's Turning Point: BoJ Hawkishness Drives Currency to One-Month High
The yen has been on a rollercoaster ride this year, but recent developments suggest that it may be finally turning in its favor. For months, every decent rally was met with the question of whether Tokyo would intervene to prop up the currency.
This time around, however, the Ministry of Finance's fingerprints are harder to find. The USD/JPY pair has dropped back towards 155.00, a level that has previously acted as a stubborn seawall.
The Bank of Japan (BoJ) is increasingly seen as leaning towards a 25-basis-point hike this month, with Governor Kazuo Ueda sounding less interested in keeping policy nailed to the floor.
Furthermore, US Fed hike expectations have been scaled back sharply over the past few days, taking some heat out of US yields and allowing EUR/USD to crawl back towards pre-Jackson Hole levels.