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The yen extended gains on Thursday after a sudden burst \u200bhigher in the previous session, though traders stopped short of attributing the move to Japanese authorities and instead pointed \u200cto a hawkish repricing of domestic rate expectations.<\/strong><\/p>\n The yen rose to an intraday peak of 157.95 per dollar in Asia, extending its 0.9% jump overnight that initially put markets on alert for any official intervention from Tokyo, though the scale and fleeting nature of the move suggested otherwise.<\/p>\n The Japanese \u200bcurrency\u2019s rally was broad-based, with the euro last down 0.38% to 183.27 yen, while sterling similarly fell 0.36% to 213.21 \u200byen . The \u200brenewed strength in the yen follows hawkish comments from Bank of Japan (BOJ) board member Hajime Takata, who said on Wednesday the central bank should \u200bconduct interest rate hikes nimbly to counter intensifying inflationary pressures, rather than adhere to a fixed semiannual pace anticipated by markets.<\/p>\n \u201c(The) remarks are the strongest messaging we\u2019ve heard from the board and reintroduces the idea of an expedited rate hike trajectory,\u201d Citi said in a client note, adding that the market is \u200btaking Takata\u2019s comments \u201cmore seriously\u201d.<\/p>\n A BOJ rate hike this month is nearly fully priced in by markets.<\/p>\n Since a rare joint yen-buying intervention between \u200bthe U.S. and Japan on July 31, the yen has struggled to find lasting support, coming under pressure from still-wide interest rate differentials, fiscal worries \u200cand \u2060a renewed spike in energy prices.<\/p>\n In the broader market, the strength in the yen left the U.S. dollar on the back foot, with the euro up marginally to $1.1593. Sterling bounced from a three-week low and last bought $1.3489.<\/p>\n The New Zealand dollar rose 0.13% to $0.5860, having slid 0.67% on Wednesday following a dovish hike from the country\u2019s central bank, while the Aussie held near a more than three-month high at $0.7166.<\/p>\n Against a basket of \u200bcurrencies, the dollar eased 0.14% \u200bto 99.46. The Canadian dollar extended \u2060overnight gains and stood at C$1.3833, after the Bank of Canada held rates on Wednesday, though it signalled its readiness to tighten policy to rein in inflation.<\/p>\n All eyes are now on Friday\u2019s U.S. nonfarm payrolls report, where analysts \u200bare forecasting an increase of 56,000 in jobs, following July\u2019s shock drop of 23,000, with unemployment \u200bholding at 4.1%.<\/p>\n It \u2060would probably need a much weaker outcome to greatly lessen the risk of a September rate hike from the Federal Reserve, with markets now pricing in a 61% chance of a move.<\/p>\n \u201cAfter Fed Chair (Kevin) Warsh\u2019s hawkish Jackson Hole speech, I think markets are back to the idea that \u2060the Fed \u200bis prepared to take action in the near term to bring inflation closer \u200bto target more quickly,\u201d said Carol Kong, a currency strategist at Commonwealth Bank of Australia.<\/p>\n \u201cPayrolls, I think, could come in solid again, given the supply shocks like the lower \u200bimmigration and increased retirement\u2026 that would give another boost to FOMC rate-hike pricing.\u201d<\/p>\n<\/div>\n
\u201cI believe there\u2019s little incentive for (the) Japanese government to intervene at this moment,\u201d said Kazumasa Ishii, a \u2060strategist at UBS SuMi Trust Wealth Management, citing \u201climited\u201d signs that dollar\/yen could scale a new multi-decade high in the near term.<\/p>\nWAITING ON PAYROLLS<\/strong><\/h2>\n