The yen gained today on news reports that the Bank of Japan is considering raising rates to 0.25% when it concludes its two-day meeting on Wednesday.

That would be an increase from the current 0-0.1% and more than the market is currently pricing in, with a 10 basis-point increase still seen as only a 55% probability.

The Japanese central bank will also detail plans to taper its huge bond-buying as it steadily unwinds a decade of massive monetary stimulus.

“We’ve seen quite a move in the yen on the day,” said Shaun Osborne, chief foreign exchange strategist at Scotiabank in Toronto. “Some people were thinking that this move had probably already played out, but I think there’s still the potential for some of these carry trades and some of the positioning to unwind a little bit further.”

The dollar was last down 0.47% at 153.29 yen. The dollar has fallen against the Japanese currency since hitting a 38-year high of 161.96 on July 3.

Osborne sees the yen having a fair value of around 145 against the dollar, saying that “there’s a way to go before the short yen trade is fully cleaned out and maybe even reversed.”

The greenback has lost around 4.7% against the Japanese currency this month.

The yen had weakened earlier today as investors closed positions before Wednesday’s interest rate decision.

“We’ve obviously had a very big move in the month of July,” said Brad Bechtel, global head of FX at Jefferies in New York.

Bechtel sees further yen gains as likely temporary, with the currency expected to continue to suffer from the wide differential between U.S. and Japanese interest rates.

“The yen is going to ultimately resolve weaker over time. It’s just a question of how long that time period is,” Bechtel said. “There’s no point in being long the yen because nobody wants to pay carry when they can earn carry in a myriad of other ways in the FX market.”

The dollar fell 0.03% to 104.55 against a basket of currencies, after earlier hitting 104.79, the highest level since July 11.

The Federal Reserve on Wednesday is expected to hold rates steady, but possibly give stronger clues that it is closer to rate reductions.

Traders see a rate cut in September as certain and are also pricing in a second and possibly third cut by year-end.

The U.S. central bank is wary of hinting at cuts too soon in case inflation rebounds, however, which may make a signal more likely at the U.S. central bank’s economic symposium in Jackson Hole, Wyoming, next month.

Data today showed that U.S. job openings fell modestly in June and data for the prior month was revised higher. Consumers’ perceptions of the labor market, meanwhile, are deteriorating.

The euro fell 0.06% to $1.0812 and earlier reached $1.0798, the lowest level since July 8.

The euro zone’s economy grew slightly more than expected in the three months to June, though a mixed underlying picture and a string of pessimistic surveys cloud the outlook for the rest of the year.

The German economy unexpectedly contracted in the second quarter after skirting a recession at the beginning of the year and July’s inflation rose.

Sterling weakened 0.2% to $1.2833 before the Bank of England’s Thursday meeting. Market pricing sees it as roughly a coin toss whether the BoE cuts rates.

In cryptocurrencies, bitcoin fell 2.64% to $65,586.

Additional reporting by Sruthi Shankar and Alun John.