The yen advanced past the key psychological level of ¥140 against the dollar as the Japanese currency extended its rally from the weakest point in nearly 38 years in July.

It appreciated as much as 0.6% versus the dollar to ¥139.96 on Monday, its strongest level since July 2023.

The yen has been the best-performing Group-of-10 currency this quarter, with a 15% gain as investors position for a further narrowing of the interest-rate gap between the U.S. and Japan.