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*Japanese yen strengthened sharply as markets increased expectations of a BOJ rate hike
*Traders are pricing around a 75% chance of a 25-basis-point hike in September
*Hawkish BOJ comments on inflation risks supported expectations of further policy normalisation
*Previous U.S.–Japan intervention keeps traders cautious about pushing USD/JPY higher
The Japanese yen strengthened sharply as markets increased expectations that the Bank of Japan could raise interest rates by 25 basis points at its September meeting. Traders are currently pricing around a 75% probability of a rate hike, following hawkish comments from BOJ policymakers regarding persistent inflation risks.
The shift in expectations has provided fresh support for the yen, as investors reassess the possibility that the BOJ may continue moving away from its ultra-loose monetary policy stance. A higher interest rate outlook could help narrow the yield gap between Japan and other major economies, reducing some of the pressure that had previously weighed on the currency.
The yen’s sharp move initially triggered speculation that authorities may have intervened in the foreign exchange market again. However, subsequent BOJ data showed no official intervention behind the latest surge, suggesting that the rally was mainly driven by stronger BOJ rate-hike expectations and market positioning.
Nevertheless, intervention risk remains an important factor supporting the yen. Previous coordinated U.S.–Japan intervention has made traders more cautious about pushing USD/JPY too aggressively higher, especially if yen weakness becomes disorderly again.
Overall, the yen remains supported by a combination of rising BOJ tightening expectations and lingering intervention risks. Moving forward, investors will continue to monitor BOJ policy signals, inflation data, and official comments from Japanese authorities for clearer direction.
Technical Analysis

USD/JPY is trading lower, currently testing the 155.75 support level, which acts as a key near-term downside pivot.
Market attention remains focused on a potential breakdown below this level. A confirmed break below 155.75 could extend losses toward the next support level at 152.10, reinforcing the bearish structure.
Momentum indicators continue to support the downside bias. The MACD is showing increasing bearish momentum, while the RSI at 31 remains below the midline, suggesting that selling pressure may persist if the breakdown is confirmed.
However, if bearish momentum begins to fade, USD/JPY may stage a technical rebound and retest the 159.95 resistance level, followed by 163.95 if recovery momentum strengthens.
Resistance Levels: 159.95, 163.95
Support Levels: 155.75, 152.10
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