Investors have more to worry about than yen bears on the hunt

AI Summary

Global investors remain bearish on the Japanese yen despite Japan's recent interest rate hike to 1% and the longest streak of nominal wage increases since 1992. Market expectations indicate a high probability of further rate hikes, influencing investor sentiment.

Why are global investors so bearish on the yen? There are good reasons Japan’s currency should be gaining in value. Last month, the Bank of Japan (BOJ) raised interest rates to a 31-year high of 1 per cent and signalled it would continue increasing borrowing costs. Bond markets are currently pricing in a nearly 90 per cent probability of another increase by December. Nominal wages in Japan have risen by more than 3 per cent for four straight months, the longest streak since 1992. Moreover, the...