TOKYO: The Japanese yen climbed to a seven-month high, touching 152 yen per dollar during a lively Tuesday trading session in Tokyo as investors reacted to growing buzz about a possible Bank of Japan rate hike.

By 5:00 p.m., the dollar slipped to 153.79 yen, down from 155.54 yen on Monday. The euro also lost ground, dropping to 1.16 against the dollar and 178.59 against the yen.

Analysts noted that the market’s turbulence was fueled largely by foreign speculators rushing to close short yen positions after recent remarks from Japanese and U.S. officials. The yen briefly soared past 152.90 per dollar in the morning before easing back to around 154 in the afternoon.

Analysts at top Japanese financial institutions observed that the dollar found support after flirting with its lowest level of the year at 152.10. Some experts believe the yen’s long slide has finally run its course, describing the 150-yen mark as a pivotal turning point.

FUJISHIRO Koichi, an economist at Daiichi Life Asset Management, attributed the yen’s appreciation from the low 160s on September 1 to the 152 range by September 8 to two main factors: stabilized expectations for U.S. interest rates and increased anticipation of a Bank of Japan rate hike. Fujishiro told the JNN network that this shift does not appear to result from currency intervention.

On U.S. monetary policy, market sentiment is divided on the likelihood of a Federal Open Market Committee (FOMC) rate hike in September. Some analysts cite inflationary pressures from tariffs and oil prices; others emphasize slowing growth in wages and rents. Fujishiro suggested the latter scenario is more likely, noting that a decline in U.S. interest rates would weaken the dollar and further support the yen.

A firmer yen, combined with climbing oil prices, put pressure on the Tokyo Stock Exchange, dragging the Nikkei 225 down 1,130.51 points, or 1.70 percent, to 65,269.33.