The yen strengthened against the dollar on Friday, edging to 159.15 per greenback as traders anticipate potential interest rate hikes from the Bank of Japan. This marked a pullback from the 160 threshold, a key level watched for possible government intervention. The move reflects growing optimism that BOJ policymakers may soon adjust monetary policy after years of ultra-low rates.

Analysts note that sustained yen weakness at 160 could prompt officials to act to prevent excessive currency depreciation, which risks inflationary pressures. Market participants are closely monitoring developments ahead of the BOJ’s next policy meeting, where decisions on rate adjustments could reshape regional currency dynamics. The dollar-yen pair remains a focal point for global investors tracking Japan’s economic recovery and monetary tightening signals.