Japanese Yen rallies to February 18 high as upbeat wage data and GDP lift BoJ hike bets
The USD/JPY pair declines for the second straight day – also marking the fourth day of a fall in the previous five – and sinks to its lowest level since February 18, around mid-153.00s during the Asian session on Tuesday.
The Japanese Yen (JPY) achieved its highest level since February 18 as optimistic wage data and GDP growth bolster expectations of a Bank of Japan (BoJ) interest rate hike. The USD/JPY pair declined for the second consecutive day, falling to its lowest point since mid-February during the Asian session on Tuesday, around the 153.00s.
Japan's real wages increased by 2.4% in July from the previous year, marking the steepest rise since May 2021 and the seventh consecutive monthly rise. The inflation rate, which crossed the 2% threshold for the first time this year, further reinforced the case for the BoJ to raise interest rates at their meeting scheduled for September 17-18.
Traders have fully priced in a 25 basis point rate hike for that period, and some analysts even anticipate a more substantial increase to counter rising inflation expectations. The USD faced additional selling pressure, despite hawkish expectations from the US Federal Reserve (Fed), and the JPY benefited from renewed speculation of potential currency market intervention by Japanese authorities.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
