Driven by expectations of a rate hike by the Bank of Japan, the yen rose to a six-month high against the dollar.

BlockBeats News, September 8 - The yen extended its recent gains against the dollar on Tuesday, supported by expectations of a faster pace of rate hikes by the Bank of Japan and the possibility of capital inflows into Japanese assets. During the Asian trading session on Tuesday, the yen rose to a six-month high against the dollar, breaking through the level seen when Japan and the U.S. conducted joint intervention in late July to curb yen weakness. Investors remained wary of further intervention after Japanese Finance Minister Katsunobu Kato stated that Japan would continue coordinating with the U.S. to ensure market stability.

"We will maintain close communication with the U.S. Treasury to work on maintaining order in the foreign exchange market. Our policy stance has not changed at all since the joint currency intervention with the U.S.," Kato said at a press conference on Tuesday. "The market is now almost fully pricing in a 25 basis point rate hike at next week's BOJ meeting. Comments from economic advisor to Sanae Takaichi have also driven a shift in rate expectations, with expectations of further tightening following a September hike," said Christopher Wong, FX strategist at OCBC Bank Research. (Jin Shi)