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

The Japanese yen appreciated towards 155 per dollar on Thursday, hovering near its peak in over two weeks. This movement is largely driven by increasing speculation that the Bank of Japan (BOJ) may hike interest rates this month. Such expectations solidified following BOJ Governor Kazuo Ueda's expressed optimism regarding Japan’s economic prospects, coupled with his assurance that the central bank will meticulously consider the merits and drawbacks of a rate increase and proceed accordingly. Additionally, Finance Minister Satsuki Katayama underscored this sentiment by affirming that the government and BOJ share a unified economic vision, indicating continued harmony between fiscal and monetary policy. On the international front, the yen's rise was also supported by a weakening dollar, following US private payrolls data that fell short of expectations, which bolstered predictions for a Federal Reserve rate reduction next week. Furthermore, market participants are evaluating the likelihood of White House economic adviser Kevin Hassett potentially succeeding Fed Chair Jerome Powell in May, a development that could lead to a more aggressive stance on easing.