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Yen strengthens as markets fully price next BoJ hike

USD/JPY fell from 160.39 to below 160.00 after MUFG cited hawkish BoJ guidance, even as Brent and US yields helped the dollar hold support.

Reported · Written up by our desk · Major Pairs

MUFG’s Lee Hardman said the Japanese yen strengthened because markets have fully priced a 25 basis point Bank of Japan rate hike for its September 18 meeting, with additional support from hawkish remarks by BoJ officials.

Hardman pointed to comments attributed to BoJ Governor Ueda about focusing more on upside inflation risks as the underlying inflation rate approaches 2%, along with reinforcement from BoJ board member Hajime Takata, who reiterated the case for another hike after voting for one in July.

Still, the note said rising Brent oil prices and higher US yields continued to support the US dollar, limiting how far USD/JPY could reverse beyond the yen’s recent gains.

FXStreet reported that after reaching a high of 160.39, USD/JPY dropped back below the 160.00 level, reflecting the stronger yen despite ongoing dollar support factors.

Latest closeBrent $95.25 ▲5.3%|USD/JPY 160.21 ▲0.3%

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