This week, the yen has been the top performer among G-10 currencies due to expectations of a narrowing yield gap between the US and Japan.
On Wednesday, the Japanese currency appreciated by as much as 0.8% against the dollar, and it has seen an overall surge of 1.9% this week.
Traders are adjusting their positions in anticipation of rate moves from the Bank of Japan and the Federal Reserve, which are expected to have a significant impact on currency dynamics.
The yen's strong performance reflects a change in market sentiment as investors adapt their strategies in response to upcoming monetary policy decisions.