The Japanese yen strengthened above 155 per dollar on Tuesday, hitting a one-month high amid expectations that the Bank of Japan would raise interest rates this week following hawkish remarks from central bank officials.
Japanese yen hits one-month on BoJ hike bets
Such a move would increase Japan’s short-term borrowing costs to 0.5%, the highest level since the 2008 global financial crisis. The BOJ is also expected to revise its inflation forecast upward, with growing optimism that rising wages will help Japan meet its 2% inflation target sustainably.
Additionally, Japan's Finance Minister, Katsunobu Kato, recently reiterated the government's commitment to taking "appropriate action" to support the yen, further boosting the currency.
Eyes on Trump's moves
Meanwhile, traders continued to assess U.S. President Trump's first day in office, which involved signing several executive orders and discussing potential tariff plans with the media.
