Yen’s surprise bounce ahead of BoJ meeting
Just as the battle of the currencies was heading toward a calm, the Japanese yen pulled a 2‑month high, snatching the spotlight right before the Bank of Japan’s next big call.
Why the yen’s got that extra oomph
- Rate‑hike whispers: Traders are guessing the BoJ might lift rates, so the yen looks cooler than ever.
- Yen‑funded carry trades in danger: With speculation tightening, many are pulling back on high‑yield currencies like the Aussie and Kiwi dollars.
- Low exchange rates: The dollar‑yen hit a low not seen since mid‑May, and the euro slowly fell behind too.
- Japanese influence on a global scale: Interventions from Tokyo and comments from big names (think Trump or local politicians) have kept the yen sturdy since early July.
What’s next on the horizon?
The BoJ is set to review policy next week, which means the yen and Japanese yields could go on a wild ride. If the bank normalizes and tightens, expect higher yields keeping the market on its toes.
How you’ll feel about it
Picture the market as a roller coaster: the yen’s climb is exciting, the carry trades are shivering, and the sheer volatility might give everyone a little heart‑rush—especially if you’re watching the dollar or euro.
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