Market News

(Bloomberg) -- The yen rose to its strongest level in more than four months as global risk-off sentiment and expectations of more interest-rate hikes from the Bank of Japan boosted its appeal.

Japan’s currency rose as much as 0.8% to 148.57 per dollar, the strongest level since Oct. 11. The move follows President Donald Trump’s plan to strengthen US semiconductor curbs, which fueled demand for haven assets.

Traders are the most bullish on the yen over the coming year since early October, as they bet on further interest-rate hikes by the BOJ. Overnight index swaps are fully pricing an increase in borrowing costs by September, and assigning a 50% chance to a move as soon as June.

Japan’s recent data has supported the case for raising rates, with the market now focusing on this week’s release of Tokyo inflation data. The nationwide reading accelerated more than expected in January on higher food prices.

As traders prepare for further moves, yen options over the next month turned the most overpriced across the Group-of-10 currencies.

--With assistance from George Lei.