FX.co ★ Yen Heads for Strong Weekly Advance

The Japanese yen hovered around 156 per dollar on Friday after rallying for two straight sessions, putting it on track for a weekly gain of about 2.5%—its strongest performance since Tokyo and Washington conducted a joint yen-buying intervention in late July. While there has been no official confirmation that this week’s advance was driven by government action, traders have speculated that authorities may have carried out a rate check, a move that often precedes direct intervention.

Markets also assessed the likelihood of more aggressive interest rate hikes by the Bank of Japan this year, amid hawkish comments from BOJ officials and growing US pressure on Tokyo to bolster the yen through tighter monetary policy. In addition, the yen drew support from broad-based dollar weakness after Federal Reserve Governor Christopher Waller said he would back keeping US interest rates unchanged if inflationary pressures continue to ease.