Japanese Yen Strengthens as BOJ Policymakers Signal Hawkish Stance

Dow Jones
Sep 03

0803 ET - The yen is climbing further against the dollar, bringing its two-day gain to around 2%, with traders on alert for a possible currency intervention. "Japanese officials from the MoF have been remarkably quiet while policymakers at the BoJ have stepped up their hawkish rhetoric with talk of 'outsized' rate hikes as they seek to cement expectations for tightening at the next meeting on September 18th," Scotiabank currency strategists say in a note. They believe dollar sentiment faces a further test this morning, with a range of data releases including the trade balance, weekly jobless claims and ISM services data ahead of Friday's August jobs report. "We remain cautious on the broader USD outlook, believing that the hawkish repricing of near-term Fed risks is unlikely to be reflected in [a] rate hike later this month."

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