USD/JPY moved from the 155 yen range to temporarily around 150 yen last week, reflecting yen strength amid dollar weakness.
This movement was driven by heightened expectations of additional Bank of Japan (BOJ) rate hikes, following the February 3rd release of the “Summary of Opinions” from January’s BOJ meeting and BOJ board member Tamura’s speech on February 6th.
On this point, I noted in my contribution two weeks ago that the BOJ appears inclined toward rate hikes, based on the view that labor shortages were making inflation more difficult to control.
In addition, the possibility of a correction in dollar strength cannot be overlooked.
