The weakening of the yen strengthens expectations of a rate hike in September, with the market focusing on the pace of the Bank of Japan’s policy.

1. Shuichi Ohsaki, Senior Portfolio Manager at Meiji Yasuda Asset Management, stated that the Japanese yen has been weakening against the US dollar recently, and the market has strongly priced in the possibility of a Bank of Japan rate hike in September. The focus is now on the pace of interest rate increases rather than the final rate level.2. Ohsaki noted that the September rate hike would be another action three months after the June hike. After the joint Japan-US intervention in the foreign exchange market at the end of last month pushed up the yen, market bets on a rate hike by the central bank further intensified, believing that the Bank of Japan must act quickly to sustain the upward momentum of the yen.