The yen rises to a seven-month high as markets focus on U.S. inflation data
智通财经2026/09/08 03:06- During Asian trading hours on Tuesday, the Japanese yen once rose 0.94% against the US dollar; USD/JPY briefly touched 152.89, hitting a new low since February and falling below the level seen during Japan's currency intervention in July. The yen had already climbed 1.2% on Monday, and has strengthened nearly 4% cumulatively since last week's level near 160. Expectations for the Bank of Japan to accelerate tightening continue to rise, and together with unwinding of carry trades and anticipated capital inflows, have jointly driven large-scale short-covering in yen positions.
- An IG market analyst pointed out that after USD/JPY broke below the key support area around 155 observed in August and May, a wave of short-covering was triggered, which could open the door for further testing of lower support levels. This rally in the yen reflects the market's repricing of a shift in the Bank of Japan's policy stance.
- The US Dollar Index was slightly dragged down by yen strength, once dipping to 98.71 and currently trading near 98.81. The market is now turning its attention to US inflation data to be released this week—this is the last batch of crucial economic data before the Federal Reserve's September meeting. After last Friday's stronger-than-expected nonfarm payrolls data, the probability of a rate hike in September has risen to about 60%.
- On the geopolitical front, on Monday Iran warned it would retaliate if the US attacked its assets again, stating that the energy infrastructure throughout the Gulf region is vulnerable to attack. Brent crude oil prices remain near a six-week high, with inflation pressures continuing to disrupt global market expectations.
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