Home · Business · Sep 9 archive
Japanese Yen Strengthens Amid Policy Shift Expectations
Confirmed
In Short: The Japanese Yen has gained strength, pushing USD/JPY towards 153.00, as comments from US Treasury Secretary Scott Bessent and a strong business survey reinforce expectations of policy changes in Japan.
MUFG’s Lee Hardman notes that the Japanese Yen (JPY) has strengthened, driving USD/JPY back towards 153.00, as comments from US Treasury Secretary Scott Bessent reinforce expectations of policy changes in Japan. A strong Tankan business survey adds to the case for continued BoJ policy normalisation and supports the Japanese Yen.
The US Dollar remains under pressure as a rallying Japanese Yen outweighs support from hawkish Fed bets and geopolitical tensions. This, along with firming expectations for another RBA rate hike later this month, acts as a tailwind for the Aussie. However, the upside attempts appear limited as Japan's upbeat wage growth data and Q2 GDP revision cement bets on a BoJ rate hike next week and continue to boost the Japanese Yen.
The yen is also benefiting from the unwinding of carry trades and growing expectations of capital repatriation to Japan. Sentiment among Japanese manufacturers improved for a second consecutive month in September, supported by resilient demand from the semiconductor and data-centre sectors. USD/JPY fell to 153.50 on Wednesday, leaving the Japanese yen close to its strongest level in almost seven months.
Expectations surrounding Japanese monetary policy are also supporting the yen. US Dollar selling remains unabated despite hawkish Fed expectations and rising geopolitical tensions, lending additional support to the pair. Bessent said he clearly understood what to expect from the Bank of Japan, particularly regarding when Japanese authorities are prepared to respond to excessive exchange-rate movements.
What's still developing
- Nothing material beyond the confirmed record.