Yen rises to highest since February, topping intervention rally

The yen on Monday strengthened to its highest level since February, surpassing the peak reached after coordinated intervention by Japan and the U.S.

Japan’s currency gained as much as 1.4% to ¥154.06 against the dollar as growing bets on Bank of Japan rate hikes fuel a sharp reversal in sentiment. It had weakened to ¥160.39 last week.

The rally has been fueled by mounting expectations for BOJ interest-rate hikes as well as speculation over a potential shift in the Government Pension Investment Fund’s asset allocation. The rebound comes after weeks of questioning the long-term effectiveness of the coordinated intervention by Tokyo and Washington.

Japan’s top foreign exchange official, Atsushi Mimura, said Friday that there’s been no change in his fighting stance on the yen, a comment that came even as the currency strengthened against the dollar.