{"id":40749,"date":"2026-02-03T11:03:12","date_gmt":"2026-02-03T03:03:12","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=40749"},"modified":"2026-02-03T11:03:12","modified_gmt":"2026-02-03T03:03:12","slug":"yen-weakens-as-dollar-regains-upper-hand","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/yen-weakens-as-dollar-regains-upper-hand\/","title":{"rendered":"Yen Weakens as Dollar Regains Upper Hand"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/yen13-1024x559.png\" alt=\"\" class=\"wp-image-17051\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USDJPY traded around <strong>155.5<\/strong>, after two consecutive losing sessions for the yen<\/li>\n\n\n\n<li>Hawkish Fed leadership expectations and Japan\u2019s fiscal outlook continue to favour the dollar<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The Japanese yen hovered near <strong>155.5 per dollar<\/strong> on Tuesday, struggling to recover after falling for two straight sessions.<\/p>\n\n\n\n<p>The move reflected renewed dollar strength, driven by robust US economic data and expectations that the next Federal Reserve chair may take a more hawkish stance.<\/p>\n\n\n\n<p>Support for the dollar has firmed as markets reassess US growth momentum, while speculation around Fed leadership has reduced expectations of aggressive easing in the near term.<\/p>\n\n\n\n<p>That shift has weighed on the yen, which remains sensitive to interest rate differentials given Japan\u2019s still-accommodative monetary stance.<\/p>\n\n\n\n<p>A cautious forecast suggests USDJPY may remain elevated as long as US data continue to outperform and rate expectations stay anchored in favour of the dollar.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Political Signals Add Pressure to the Yen<\/h2>\n\n\n\n<p>Domestic political rhetoric has also played a role in weakening the currency. Over the weekend, Prime Minister <strong>Sanae Takaichi<\/strong> described a weak yen as a potential opportunity for Japan\u2019s export sector, remarks that were widely interpreted as tacit tolerance for further depreciation.<\/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 Takaichi cites weak yen&#39;s benefits even as her government threatens intervention <a href=\"https:\/\/t.co\/oF1J6hSJrK\">https:\/\/t.co\/oF1J6hSJrK<\/a> <a href=\"https:\/\/t.co\/oF1J6hSJrK\">https:\/\/t.co\/oF1J6hSJrK<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/2017644101923975332?ref_src=twsrc%5Etfw\">January 31, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Although Takaichi later clarified that her comments were meant to emphasise the need for an economy resilient to currency swings, the initial message added to market perceptions that policymakers are in no rush to defend the yen.<\/p>\n\n\n\n<p>Finance Minister <strong>Satsuki Katayama<\/strong> reinforced that view, stating that the prime minister was merely outlining standard economic principles regarding the impact of a weaker currency.<\/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 Finance Minister Satsuki Katayama said that Prime Minister Sanae Takaichi wasn\u2019t overly highlighting the benefits of a weak yen at the weekend, in a move that suggested she was trying to preserve speculation over government intervention risks <a href=\"https:\/\/t.co\/6XWlQdHENE\">https:\/\/t.co\/6XWlQdHENE<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2018498273665773731?ref_src=twsrc%5Etfw\">February 3, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>These signals have reduced expectations of near-term verbal or direct intervention, keeping the yen on the defensive.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Election Outlook and Fiscal Risks Weigh on Sentiment<\/h2>\n\n\n\n<p>The yen\u2019s softness also comes ahead of the <strong>February 8 snap lower house election<\/strong>, where Takaichi\u2019s ruling party is expected to gain seats.<\/p>\n\n\n\n<p>Markets anticipate that a stronger mandate could lead to more expansionary fiscal policies, including potential tax cuts and increased spending.<\/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\">A summary of opinions from the Bank of Japan\u2019s January policy meeting indicated a growing awareness of the need to raise interest rates in a timely fashion as authorities monitor the impact of the weak yen on inflation <a href=\"https:\/\/t.co\/Su2JPQqs4r\">https:\/\/t.co\/Su2JPQqs4r<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2018142665280241716?ref_src=twsrc%5Etfw\">February 2, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Japanese government bonds and the yen both weakened last month amid expectations of fiscal stimulus, and ongoing discussions around tax relief have continued to raise concerns about public finances.<\/p>\n\n\n\n<p>These dynamics complicate the outlook for monetary normalisation and reinforce downward pressure on the currency.<\/p>\n\n\n\n<p>If fiscal expansion accelerates after the election, the yen may face renewed selling as investors reassess Japan\u2019s debt trajectory.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Technical Analysis<\/h2>\n\n\n\n<p>USDJPY edged lower to <strong>155.433<\/strong>, down <strong>0.12%<\/strong>, following a modest intraday decline of 18.2 pips. Price briefly peaked at <strong>155.617<\/strong> before momentum faded, leading to a series of shallow lower highs and lower lows.<\/p>\n\n\n\n<p>Support was found at <strong>155.380<\/strong>, with price attempting to stabilise above this level into the current candle.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2026\/03\/image-1024x474.jpg\" alt=\"\" class=\"wp-image-40750\" \/><\/figure>\n\n\n\n<p>The pair is now trading in tight proximity to its moving averages, all converging around the <strong>155.42\u2013155.43<\/strong> zone (MA5\u2013MA30), signalling indecision.<\/p>\n\n\n\n<p>Volume remains muted at <strong>38.00<\/strong>, and no clear breakout signal has emerged yet. A clean push above <strong>155.50<\/strong> could revive bullish bias, while failure to hold above <strong>155.38<\/strong> may invite further downside pressure.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What to Watch Next<\/h2>\n\n\n\n<p>Traders will focus on upcoming US data releases for confirmation of growth resilience, as well as any further guidance on the <a href=\"https:\/\/t.co\/iqSILrtn7C\" target=\"_blank\" rel=\"noopener nofollow\" title=\"\">Federal Reserve\u2019s leadership<\/a> and policy outlook. In Japan, election developments and fiscal signals will remain central to yen sentiment.<\/p>\n\n\n\n<p>Unless Japanese officials deliver clearer resistance to currency weakness, the yen may struggle to regain ground against a dollar supported by yield differentials and policy divergence.<\/p>\n\n\n\n<p><strong>Learn more about trading <a href=\"https:\/\/www.vtmarkets.com\/forex\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Forex Pairs<\/a> on VT Markets <a href=\"https:\/\/www.vtmarkets.com\/Insights\/\" target=\"_blank\" rel=\"noopener\" title=\"\">here<\/a>.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>USDJPY steadies near 155.5 as strong US data and Japan\u2019s election outlook keep pressure on the yen.<\/p>\n","protected":false},"author":64,"featured_media":17051,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[10,45],"class_list":["post-40749","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-forex","tag-yen"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40749","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\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=40749"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/40749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17051"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=40749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=40749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=40749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}