The yen rallies to 152, its highest level since February against the dollar
A Japanese currency surge broke the 150 barrier while the US dollar index fell amid expectations of a rapid Bank of Japan rate increase.
Japanese traders pushed the yen sharply higher as it reached a range centered on 152 yen per dollar during Tuesday morning sessions. This figure marked a six-month high and surpassed previous levels established in late August and early May. The rally extended momentum from the previous trading day, where the pair had climbed to approximately 153.50 due to weak volume following the US Labor Day holiday.
Market participants cite potential unwinding of carry trades and anticipation of a faster tightening cycle by the Bank of Japan as primary drivers. This strengthens the yen despite ongoing speculation about policy shifts in the United States. The greenback index dropped 0.25 percent to around 98.93, while the euro and British pound showed modest gains.
Financial experts noted that traders are currently pricing in accelerated tightening measures from Japanese authorities. One analyst suggested the pair may stabilize between 155 and 160 yen per dollar if recent trends persist. However, immediate tests of lower support zones were not ruled out. Upcoming US consumer price index data will serve as a critical benchmark for Federal Reserve decisions later this week.
