0859 GMT - Overseas investors pricing in a more hawkish BOJ and adjustments in portfolio positioning by real-money investors at the beginning of the month are sending the yen higher, State Street strategist Masahiko Loo says in a note. The yen hit its strongest intraday levels since Aug. 3, with the dollar last down 1.3% at 156.62 yen. While the carry trade still works, "it is no longer a free lunch," the strategist says. "Markets are finally starting to buy into the idea that Japan may continue normalizing policy into 2027," he says. Traders are becoming less comfortable running aggressive short-yen positions as they more cautiously assess a more hawkish BOJ path, Loo notes.