Yen Surges to Six-Month High on BoJ Rate Bets — SkimNews
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- Yen rose to ¥153.40 per dollar on Tuesday, the strongest level of 2026, extending Monday's 1.4% surge that touched ¥154.04 and bringing September gains against the dollar to 4%
- Japanese authorities carried out a ¥15.4tn ($99.6bn) market intervention in July and August, with "unusual" additional support from the US government
- Bank of Japan is expected to hike rates 25bps to 1.25% next week (80% priced in), after US Treasury Secretary Scott Bessent publicly pressed for higher rates, with growing bets on a rare back-to-back October hike
- The carry trade has expanded into "the largest build-up of the past three decades," with cross-border yen borrowing up two-thirds from ¥216tn in December 2021 to ¥360tn by March 2026
- Market participants warned the rapid yen rise has revived fears of a violent carry-trade unwind similar to 2024's summer ructions, though BNP Paribas Asset Management's Mark Richards questioned whether the BoJ has "the stomach" to deliver sustained hawkishness
Why it matters: The yen's 4% September surge past ¥154 reflects an 80%-priced BoJ rate hike next week and growing bets on a rare back-to-back October move. The source flags renewed carry-trade unwind risks reminiscent of 2024's summer ructions — with cross-border yen borrowing at ¥360tn, the largest build-up in three decades.
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