The Japanese yen appreciated past 155 per dollar on Monday, reaching three-week highs amid growing speculation that the Bank of Japan could raise interest rates next week following hawkish signals from policymakers.
Traders are also betting that Prime Minister Sanae Takaichi’s government would support a stronger yen, which has been pressured partly by delayed rate hikes, to counteract the impact of higher import costs on inflation.
Meanwhile, data showed real wages fell for the tenth consecutive month in October, and Q3 economic growth contracted more sharply than initially reported, adding complexity to the rates outlook.
Externally, the yen gained further support from broad dollar weakness amid expectations that the US Federal Reserve will deliver a quarter-point rate cut this week.
AloJapan.com