The yen was on course to notch its longest winning streak since 2018 amid signs of position adjustments as speculation mounts that the Bank of Japan will tweak monetary policy this month.

Profit-taking in carry trades and hedging against the risk of a policy tweak have been cited among likely drivers this week of the currency, which has gained for seven days in a rebound that’s taken it back to levels last seen in mid May.

The speculation about the BOJ also sent the government bond yields and indexed swaps higher, despite declines in the US Treasury yields. The 10-year JGB yield is two basis points below the central bank’s cap of 0.5%. The overnight indexed-swap hit a four-month high as the yen rebounded more than 5% from the 2023 low it reached on June 30.

“When you look at the selloffs of JGBs and the yen’s recent moves — or yen’s strength, it seems speculation about the BOJ’s policy tweak is encouraging investors to unwind their positions,” said Teppei Ino, the Tokyo head of global markets research at MUFG Bank Ltd.

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