Yen soars as Bank of Japan tipped to raise interest rates

JUST IN: The Japanese yen soars more than 1.7% against the dollar to a one-month high, on speculation the Bank of Japan is set to raise interest rates as global markets stay jittery.

The yen just jumped 1.7% against the dollar, its biggest move in weeks, and it's all on a hunch.

Speculation is building that the Bank of Japan is about to raise interest rates. The currency hit 155.85, a one month high, after a 0.9% move the day before. What lit the fuse was board member Hajime Takata saying the bank needs to act more nimbly. Citi called it the strongest messaging they've heard from the board. Traders now put a 77% chance on a hike at the meeting starting September 17.

Remember, Japan spent decades fighting deflation, so every hike here is history. Rates sit at just 1%, untouched since July.

And one analyst summed up the mood perfectly. Markets this jumpy don't need a shock to move hard, a rumour is enough. That's where we are.

This is Sara White, reporting for HIT.