
Tankan Backs BOJ Tightening, but Yen Rate Expectations Ease
Japan’s Tankan supports further BOJ tightening, although softer rate expectations could limit support for the Japanese yen.
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Japan’s Tankan supports further BOJ tightening, although softer rate expectations could limit support for the Japanese yen.

Recent trading sessions have produced mixed results for the Japanese yen. By the end of last week, USD/JPY had fallen by more than 1.00%, reflecting a modest recovery in the yen. However, the start of this week has seen the pair move slightly back in favor of the U.S. dollar, posting gains of around 0.04%.

The Japanese yen continues to face challenging conditions in the short term. By the end of the week, USD/JPY had gained nearly 2.00% over the previous five trading sessions, highlighting ongoing weakness in the yen and showing that the U.S. dollar continues to gain ground.

Japan CPI strengthened the case for a September BOJ hike, yet the yen remains weak as traders weigh intervention, yields and higher oil prices.

The Japanese yen surged after a suspected MOF intervention sent USD/JPY tumbling, shifting the spotlight away from today's Bank of Japan meeting.

The trading week continues, and the Japanese yen’s lack of short-term strength is once again standing out. Recent USD/JPY price action shows the pair up slightly more than 0.2% over the last three trading sessions, suggesting that some buying pressure remains near recent highs.

A new trading week begins, and one of the factors that continues to stand out is the neutrality of the Japanese yen. Japan’s currency has struggled to recover consistent short-term appeal, something reflected in USD/JPY price action, with the pair moving around 0.1% over the last two sessions near the reference area of 160 yen per dollar.

Recent sessions have not been easy for the Japanese yen, as the currency has failed to sustain demand against the US dollar. In fact, USD/JPY has gained close to 1.00% over the last ten sessions, reflecting the yen’s short-term loss of strength.

Recent sessions have not been easy for the Japanese yen, as USD/JPY has gained close to 0.8% over the last five sessions, showing that dollar strength remains relevant in the short term. Buying pressure has held up partly because of expectations of a more aggressive Federal Reserve, which has continued to support the US bond market and, in turn, the US dollar.

Recent trading sessions have started to become challenging for the stability of the Japanese yen’s strength, as USD/JPY has now posted a three-session bullish streak, with a gain of around 0.8% in the short term.

During the latest trading session, the yen has once again shown a meaningful increase in volatility, with USD/JPY falling by more than 1.00% in the short term in favor of the Japanese currency, reactivating a dynamic of broader price swings.

The week started on slightly favorable ground for the yen. At the moment, USD/JPY is opening the week with a notable decline, marking at least two consecutive sessions with losses of around 0.3% in favor of the Japanese yen in the short term.

With just a few days left before the end of the trading week, USD/JPY price action continues to show no meaningful directional changes in the short term. Over the past two sessions, the pair has posted an average move of around 0.1%.
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