The U.S. dollar weakened against the yen in morning trading in Tokyo, as traders bought yen amid expectations that the Bank of Japan (BOJ) may raise interest rates at its meeting this month. This follows pressure from U.S. Treasury Secretary Scott Bessent on the BOJ to accelerate rate hikes to curb the yen's depreciation. As of noon Tokyo time, the dollar was trading at 158.03-158.05 yen, compared with 158.64-158.74 yen in New York. Meanwhile, the euro stood at 1.1591-1.1591 dollars and 183.17-183.19 yen. The yen strengthened after NHK reported that Bessent told Japanese Finance Minister Katsunobu Kato and BOJ Governor Kazuo Ueda on the sidelines of the G20 meeting that it was time for the BOJ to raise interest rates, marking an escalation of pressure on Japan after he had previously cooperated in market intervention to support the yen in July. Meanwhile, BOJ hawkish board member Hajime Takata said the BOJ should raise interest rates as appropriate, considering both domestic and international financial conditions.
BOJ rate hike expectations push Japanese government bond yields higher, lowering bond prices.
