The yen rallied nearly 2% against the USD/JPY pair — one of the sharpest moves since July’s FX interventions. As the spike hit its peak, rumors swirled about fresh government action, but there’s been no official confirmation.

What’s Moving the Market

Traders are reacting to a jump in odds for a 25 bps Bank of Japan rate hike in September — now at 75%. Sentiment got an extra boost from BoJ board member Hajime Takata, who said the central bank needs to move faster given persistent inflation pressures — calling for the BoJ to hike rates more quickly.

The Fed Factor and the Dollar

Fed Governor Christopher Waller today noted he’s seeing early signs of disinflation and favors keeping rates unchanged at the next meeting. That’s a shift from previous hawkish talk and adds some pressure on the dollar. His full remarks are in this official speech.

What It Means for Crypto

The yen’s sharp surge could be a risk-off signal for digital assets: there’s a higher chance of unwinding carry trades and trimming risk-on positions. The Fed’s softer tone might cushion the blow, but the near-term bias is leaning cautious for crypto traders.