Yen rises to highest since February, topping intervention rally

JUST IN: The yen surges as much as 1.4% to 154.06 against the dollar, its strongest since February, as bets on Bank of Japan rate hikes fuel a sharp reversal.

The yen just ripped to 154 against the dollar, its strongest since February.

Up as much as 1.4 percent in London trading, to 154.06, and here's what makes that number interesting. It's stronger than the peak Japan got when it actually spent money on coordinated intervention with the US. The market did on its own what Tokyo paid billions to force. Last week this thing was at 160.39. That's a violent turnaround in a currency that spent two years being everyone's favourite punching bag.

The fuel is bets that the Bank of Japan finally hikes rates. The trigger, traders say, was the break of 155, a level that had acted as a floor since those intervention episodes. Add a US holiday draining liquidity, and the move got exaggerated.

So the floor is gone, the shorts are bleeding, and the BoJ hasn't even done anything yet. Imagine the move when it does.

This is Sara White, reporting for HIT.