Yen extends losing streak as traders question BOJ's rate-hike pace

The Japanese yen has been on a losing streak for three consecutive days against the dollar, according to market reports on September 22. Traders are concerned about whether the Bank of Japan will raise interest rates quickly enough to close the gap with global peers. Despite a recent rate hike, the yen has retreated from a seven-month high earlier in September.

Some policymakers pushed for a more cautious pace, which could make additional hikes harder to implement. Naomi Fink, a chief global strategist at Amova Asset Management, noted that the BOJ's pace remains uncertain, with questions about the neutral and terminal policy rates still open for debate. The yen slipped 0.22% to 157.70 against the dollar, with declines partly due to a Japanese holiday and the possibility of intervention.

Factors such as the Federal Reserve's rate hikes and the perception of further rate increases this year are weighing on the yen. While Japan may intervene again, traders believe that the tightening cycle will not be fast enough to challenge the dollar's yield advantage. The euro also experienced a slight decline against the dollar, while the British pound showed minimal change.

European Central Bank officials have maintained a hawkish tone, with an October hike still on the table. Brent crude futures rose slightly, but are still below a four-month high.