Japanese yen surges as BOJ hike bets rise and Fed outlook weighs on dollar

  • The yen briefly reached 155.47 per dollar on September 3, gaining 2.08% and reaching its strongest level since May.
  • Markets priced about 75% odds of a 0.25 percentage-point BOJ hike, while September Fed hike odds fell to roughly even from about 70% earlier in the week.
  • Asian equity futures for Japan, South Korea and Australia pointed higher after Waller backed steady rates if price pressures continue easing.

The Japanese yen surged in New York trading on September 3, briefly reaching 155.47 per dollar for a 2.08% intraday gain and its strongest level since May, as markets raised expectations for faster Bank of Japan tightening and the dollar weakened after Federal Reserve Governor Christopher Waller said he could support holding rates steady if inflation continues moving toward 2%. Asian equity futures for Japan, South Korea and Australia pointed higher after Wall Street gains, while markets reduced September Federal Reserve hike expectations to roughly even odds from about 70% earlier in the week. The dollar index fell 0.69% to 98.91, the dollar reached its lowest level since May, and markets priced about a 75% chance of a 0.25 percentage-point BOJ hike at the September 17–18 meeting.

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