{"id":38356,"date":"2026-01-06T17:21:14","date_gmt":"2026-01-06T09:21:14","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=38356"},"modified":"2026-01-06T17:21:14","modified_gmt":"2026-01-06T09:21:14","slug":"yen-steadies-as-boj-uncertainty-and-fiscal-concerns-cap-upside","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/yen-steadies-as-boj-uncertainty-and-fiscal-concerns-cap-upside\/","title":{"rendered":"Yen Steadies as BoJ Uncertainty and Fiscal Concerns Cap Upside"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/USDandYen-1024x576.png\" alt=\"Japanese Yen Cash on Focus\" class=\"wp-image-38357\" \/><figcaption class=\"wp-element-caption\"><br><\/figcaption><\/figure>\n\n\n\n<p><strong>Key Points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A positive risk tone continues to weigh on the safe-haven yen, although intervention fears limit losses.<\/li>\n\n\n\n<li>Diverging BoJ\u2013Fed policy outlooks also lend support to the low-yielding yen and weigh on USDJPY.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p>Investors remain uncertain about the pace of policy tightening by the Bank of Japan, amid expectations that energy subsidies, stable rice prices and low petroleum costs will keep inflation subdued into 2026. This, together with fiscal concerns stemming from Prime Minister Sanae Takaichi\u2019s large-scale spending plans to stimulate growth, has failed to help the Japanese yen build on Monday\u2019s rebound from a two-week low against the US dollar.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Japan&#39;s cash in circulation falls for first time in 18 years in 2025 on BOJ stimulus exit <a href=\"https:\/\/t.co\/yBzvvFoxRF\">https:\/\/t.co\/yBzvvFoxRF<\/a> <a href=\"https:\/\/t.co\/yBzvvFoxRF\">https:\/\/t.co\/yBzvvFoxRF<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/2008430874182799659?ref_src=twsrc%5Etfw\">January 6, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The hawkish outlook lifted the rate-sensitive two-year Japanese government bond yield to its highest level since 1996, while the benchmark 10-year JGB yield climbed to its highest level since 1999 on Monday. The resulting narrowing of the rate differential between Japan and other major economies could help limit any meaningful downside to the yen, amid speculation over possible government intervention.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Japan\u2019s 10-year government bond auction drew demand that was in line with its 12-month average as high yields lured investors <a href=\"https:\/\/t.co\/wQquUGlFSF\">https:\/\/t.co\/wQquUGlFSF<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2008387122349187258?ref_src=twsrc%5Etfw\">January 6, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Bank of Japan Governor Kazuo Ueda said on Monday that the central bank will continue raising interest rates if economic and price developments remain in line with its forecasts. He added that adjusting the degree of monetary support will help the economy achieve sustainable growth, and that wages and prices are highly likely to rise moderately in tandem. This keeps the door open for further BoJ policy normalisation.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Bank of Japan Governor Kazuo Ueda used his first public appearance in the new year to underscore his intention to keep raising the benchmark rate in a speech to private bankers <a href=\"https:\/\/t.co\/NkVML2KpvA\">https:\/\/t.co\/NkVML2KpvA<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2008018794946429353?ref_src=twsrc%5Etfw\">January 5, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Technical Analysis<\/h2>\n\n\n\n<p>USDJPY\u2019s price action has slowed, with the pair trading in a tight range between <strong>155.650 <\/strong>and <strong>157.000<\/strong>, as shown in the chart below. The moving averages are also clustered closely together, signalling the absence of a clear trend. For a more decisive directional move, a widening gap between the EMAs would be required, indicating stronger momentum in the market.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/codeZTU1Y2IzODQ4NjA1ZGQzYTk2NTQ1NmM1MDYzMTAyNGJfSDJMRmh0NEVRaWJlOHZodncyTFprd1d6b05UdGdUdnVfVG9rZW46RFF6OWJma0pXb2piSVF4THZHaGxmRHdqZ0tmXzE3Njc2OTExODY6MTc2NzY5NDc4Nl9WNA.jpg\" alt=\"\" \/><\/figure>\n\n\n\n<p>The MACD shows the signal line hovering close to zero level, with some bearish bars appearing in negative territory. However, this setup is not strong enough to justify short positions. It is preferable to see at least two indicators aligned in the same direction to provide stronger confirmation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Cautious Outlook as Non Farm Payroll Awaits<\/h2>\n\n\n\n<p>Traders are keenly awaiting Friday\u2019s release of the US Nonfarm Payrolls report, which, together with other key US macroeconomic data due this week, will be scrutinised for signals on the Federal Reserve\u2019s rate-cut trajectory. This is likely to play a crucial role in shaping the US dollar\u2019s direction and providing fresh impetus for USDJPY. Nevertheless, the broader fundamental backdrop remains tilted in favour of the yen bulls.<\/p>\n\n\n\n<p><strong>Learn more about <\/strong><strong><a href=\"https:\/\/www.vtmarkets.com\/markets\/\">trading<\/a><\/strong><strong> on <\/strong><strong><a href=\"http:\/\/www.vtmarkets.com\/trade-now\">VT Markets<\/a><\/strong><strong>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Japanese yen struggles to attract buyers amid uncertainty over the timing of the next BoJ rate hike. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":73,"featured_media":38357,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,82,81,83,45],"class_list":["post-38356","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-jpy","tag-usd","tag-usdjpy","tag-yen"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/73"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=38356"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/38357"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=38356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=38356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=38356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}