FX.co ★ Japanese Yen Firms Up on BOJ Hike Bets

The Japanese yen strengthened beyond 155 per dollar on Monday, achieving a three-week peak as speculation mounts that the Bank of Japan may increase interest rates next week, following hawkish indications from policymakers. Additionally, investors are speculating that Prime Minister Sanae Takaichi's administration will endorse a stronger yen. The currency has been under strain, partly due to delayed rate hikes aimed at mitigating the effects of higher import costs on inflation. Concurrently, data revealed a tenth consecutive month of declining real wages in October, coupled with a more pronounced contraction in Q3 economic growth than initially reported, complicating the interest rate outlook. On the international front, the yen was further bolstered by a broadly weaker dollar, fueled by expectations that the US Federal Reserve will execute a quarter-point rate cut this week.