The yen was largely rangebound against other G10 and Asian currencies, but
expectations of Bank of Japan tightening could lend support. Commonwealth Bank
economist and FX strategist Carol Kong noted media reports that a government
faction led by Sanae Takaichi supports near-term BOJ hikes, while Takaichi’s
preference for lower rates is widely seen as constraining the BOJ’s pace.
Markets assign about a 70% probability to a 25bp BOJ hike at the September
meeting. USD/JPY was around 159.41, little changed.
