The yen jumped to the 149 level against the U.S. dollar in London trading Wednesday, its strongest level since March, following perceived hawkish remarks by the Bank of Japan chief after an interest rate hike.
The yen drew buying after BOJ Governor Kazuo Ueda signaled the possibility of raising its policy rate further depending on economic data after the central bank lifted the policy rate to around 0.25 percent from the previous zero-to-0.1 percent range.
The Japanese currency was trading at the upper 152 level in the morning in Tokyo. It strengthened to the 151 level shortly after the BOJ announcement around noon but soon fell back to the 153 range. However, Ueda's remarks at the post-meeting press conference saw the yen resume its advance.
The yen has appreciated amid a market consensus that the interest rate differential between Japan and the United States will narrow, especially with widespread speculation that the U.S. Federal Reserve will begin cutting rates later this year.
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