FX.co ★ Yen Tries to Recover on BOJ Hike Bets

The Japanese yen hovered around 163 per US dollar, attempting to rebound from the previous session’s 40-year low of 163.24. The move followed reports that Bank of Japan officials are open to raising interest rates more quickly than markets currently anticipate, as well as renewed speculation about potential currency intervention by Tokyo. The yen has come under sustained pressure in recent weeks as escalating tensions in the Middle East have driven oil prices higher, putting additional strain on Japan’s import-dependent economy.

Markets have also been adjusting to a shifting policy landscape under Prime Minister Sanae Takaichi, whose administration has struggled to dispel concerns that it might press the BOJ to postpone further rate hikes. Finance Minister Satsuki Katayama reiterated that authorities stand ready to take decisive action if excessive yen weakness persists. Tokyo intervened in the foreign exchange market in April and May after the yen fell below 160 per dollar, but the impact proved limited amid broad dollar strength and still-low Japanese interest rates.