The Japanese yen strengthened past 155 per dollar on Tuesday, reaching a one-month high amid bets that the Bank of Japan would raise interest rates this week following hawkish comments from central bank officials. That would lift Japan’s short-term borrowing costs to 0.5%, the highest since the 2008 global financial crisis. The BOJ is also likely to revise its inflation forecast higher, with growing optimism that rising wages will help Japan stay on track to meet the BOJ’s 2% inflation target sustainably. Additionally, Japan's Finance Minister, Katsunobu Kato, recently reaffirmed the government's commitment to taking "appropriate action" to support the yen, which further bolstered the currency. Meanwhile, traders continued to assess U.S. President Trump’s first day in office, which included signing multiple executive orders and discussing potential tariff plans with the press.
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