Yen Jumps to Two-Week High as Rate-Gap Bets Hit Dollar

The Japanese yen strengthened for a second session on Thursday, appreciating as much as 0.6% to ¥146.55 per dollar in late Asian trading. The currency briefly touched ¥146.52, its strongest level in nearly two weeks, after an initial 0.67% advance earlier in the day. Traders attributed the move to growing expectations that the interest-rate gap between Japan and the United States could narrow. Market pricing shows increasing doubts that the Federal Reserve will resume tightening, while speculation persists that the Bank of Japan may edge away from negative rates later this year. The dollar’s retreat was broad-based. Sterling climbed after reports highlighting the Bank of England’s relatively hawkish stance compared with the Fed, leaving the pound up around 0.4% on the session. Government bond yields in both Japan and the U.K. were little changed.