The USD/JPY exchange rate has surged to nearly 155, raising concerns about potential verbal intervention and interest rate hikes by the Bank of Japan. The yen has depreciated by approximately 2.8% this month, making it one of the weakest major currencies. If it surpasses 155, it will reach its highest level since November 22.
Analysts warn that a breach of this level might prompt the Bank of Japan to consider a rate hike. Current overnight index swaps indicate a 19% probability of a rate hike this week. Previously, expectations for a December rate increase had fallen from 60% due to media reports.
Further yen movements depend on the upcoming Federal Reserve policy meeting, which precedes the Bank of Japan's decision.
