The Japanese yen weakened in thin holiday trading, keeping investors alert to the risk of official intervention, even after the Bank of Japan’s recent rate hike.
📉 Key market moves
- USD/JPY rose 0.42% to 156.44
- Dollar index edged up to 97.96
- Euro steady at $1.1782, sterling slipped to $1.3504
- Bitcoin gained 0.5% to ~$88,300
🏦 Policy backdrop
- The Bank of Japan signaled readiness for further rate hikes as underlying inflation trends toward its 2% target
- Japan’s government proposed record fiscal spending, raising concerns about debt and currency pressure
- Finance Minister Satsuki Katayama issued Tokyo’s strongest warning yet on potential FX intervention
🌍 Global context
- The dollar remains under pressure as markets price 2–3 Fed rate cuts in 2026, possibly starting as early as March
- Diverging monetary paths are keeping FX volatility elevated, particularly in USD/JPY
📌 Bottom line
Despite tighter BOJ policy, fiscal concerns and global rate dynamics continue to weigh on the yen — leaving markets highly sensitive to any hint of Japanese currency intervention.