Yen jumps 1.5% as BOJ rate-hike expectations rise

The Japanese yen strengthened about 1.5% against the U.S. dollar as expectations for another Bank of Japan rate increase moved higher.
The $JPY rallied after signals that the BOJ could raise rates by 25 basis points this month, with policymakers increasingly focused on persistent inflation and currency weakness.
Further BOJ tightening could also reshape Asia's carry trade. BBVA argues that continued Japanese rate increases may encourage traders to shift away from the yen and increasingly use the Chinese yuan as a regional funding currency.
The immediate move is supportive for $JPY, although a broader unwind of yen-funded carry positions could increase volatility across global risk assets.