Yen Set for Best Month of Year as Traders Ramp Up Long Bets in Hopes of Rate Hike — TradingView News

Japanese yen has powered higher by about 5% against the US dollar in July. More volatility looms this week as Bank of Japan decides interest rates.

• The USDJPY pair is every bear’s dream right now. After monthslong yen battering, which placed the Japanese currency at the bottom of the performance rankings for the year, the exchange rate has flipped the script. Now, the yen is in rally mode against the weakening greenback — the dollar-yen is up a hefty 5% so far into July and more volatility is expected this week. Traders, get your bets ready — it’s go time (almost).
• The Bank of Japan is drawing closer to its key Wednesday meeting (it doesn’t get more key than this) when policymakers decide whether to raise the benchmark interest rate. Traders are already casting their votes. As you can tell by the powerful surge in the yen, forex speculators expect the Japanese central bank to tweak its rate to the upside by 0.15% or even 0.25%. This conviction has pulled the yen out of its 38-year slump.
• On the other end of the spectrum, analysts warn that a decision by the BoJ to leave rates unchanged might knock the yen back to the ballpark of ¥160. Early on Monday, the dollar-yen pair was floating at a three-month low of around ¥153.50, down 5.1% from its early-July high of ¥162 not seen since 1986. The dollar was well-bid against other rival currencies with the EUR/USD hovering near $1.0850.