Bank of Japan (BoJ) governor Kazuo Ueda listens to a question during a press conference after a two-day monetary policy meeting at the BOJ headquarters in Tokyo, March 19, 2024. AFP-Yonhap

A growing number of investors are rushing to take profits from the strengthening Japanese yen over the past few months, buoyed by the Bank of Japan's (BOJ) monetary tightening, market watchers said Wednesday.

The exchange rate surpassed 1,000 won ($0.69) against 100 yen on Wednesday. According to Hana, Shinhan, Woori and NH NongHyup, 100 yen traded at over 1,001.30 won, marking a significant yen gain since 850 won per 100 yen in mid-June last year. The day before, the Korean currency traded at 989.85 won against 100 yen.

The watchers expect the Japanese currency will gain further, aided by the receding power of the dollar amid uncertainties caused by U.S. President Donald Trump's tariff provocations.

According to the financial industry data, the total amount of the Japanese currency deposited with the country's top five commercial lenders — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — came to 72.4 billion yen as of March 7.

The yen deposits have dropped by about 10 percent from 80.2 billion yen at the end of February last year.

The slide began last August and continued over the next six months. The end-August figure was 77.8 billion yen, but has since declined to 72.5 billion yen as of end-February.

The downtrend coincided with the BOJ rate hike to 0.25 percent in July last year, followed by a further increase to 0.5 percent in January, which pushed up the key rate to a 17-year high.

The financial market is pricing in further tightening, as inferred from BOJ Deputy Governor Shinichi Uchida who said during a speech to business leaders Wednesday the key rate remains on a gradual upward path.

The BOJ, according to the deputy governor, will continue to raise the policy rate and adjust the degree of monetary accommodation.

The hawkish comment pushed up the yields on 10-year Japanese government bonds to 1.5 percent, the highest since June 2009.

This strengthened the Japanese currency against the Korean won.

Some market watchers say the yen's recovery is in part supported by investor preference for safe-haven assets amid fears of a recession in the U.S.

Shinhan Bank analyst Baek Seok-hyun said the Japanese currency could continue strengthening, propelled by economic slowdown concerns in the world's largest economy.

"The short-term yen appreciation is likely to continue, amid the receding power of sustained strength of the U.S. dollar," he said.