{"id":31897,"date":"2025-10-10T03:15:31","date_gmt":"2025-10-10T03:15:31","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=31897"},"modified":"2025-10-10T03:15:31","modified_gmt":"2025-10-10T03:15:31","slug":"yen-weakens-to-8-month-low-amid-policy-concerns","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/yen-weakens-to-8-month-low-amid-policy-concerns\/","title":{"rendered":"Yen Weakens to 8-Month Low Amid Policy Concerns"},"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-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/yen5-1024x559.png\" alt=\"\" class=\"wp-image-17043\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>USD\/JPY hovers near 152.95, on track for a weekly loss of nearly 4% \u2014 its steepest since September 2024.<\/li>\n\n\n\n<li>Traders now see less than a 50% chance of a Bank of Japan rate hike in December, shifting expectations to March 2026.<\/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 extended losses on Friday, trading around <strong>\u00a5152.95 per dollar<\/strong>, its weakest level since February, as investors reacted to political developments that signalled continuity in Japan\u2019s ultra-loose monetary stance.<\/p>\n\n\n\n<p>The currency has depreciated nearly <strong>4% this week<\/strong>, its largest drop in more than a year, amid rising bets that the <strong>Bank of Japan (BOJ)<\/strong> will delay tightening further.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Leadership Change Reinforces Fiscal Dovishness<\/h2>\n\n\n\n<p>Markets were rattled after <strong>Sanae Takaichi<\/strong>, known for her preference for aggressive fiscal spending, won Japan\u2019s leadership race, paving her way to become the next <strong>prime minister<\/strong>.<\/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 new ruling party chief Sanae Takaichi pushed back against the view she favors further weakness in the yen, a comment that follows a slump in the currency in the aftermath of her leadership win at the weekend <a href=\"https:\/\/t.co\/Bgyzxod6js\">https:\/\/t.co\/Bgyzxod6js<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1976295166827802661?ref_src=twsrc%5Etfw\">October 9, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Her victory stoked expectations of expanded government stimulus and continued BOJ accommodation.<\/p>\n\n\n\n<p>Takaichi said on Thursday that the central bank would operate \u201cindependently while aligning with the government\u2019s economic goals,\u201d a statement seen by traders as a signal of policy continuity rather than reform. Her pledge to \u201cavoid excessive yen depreciation\u201d did little to arrest the slide, as investors interpreted the comments as symbolic rather than interventionist.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Policy Outlook and Market Positioning<\/h2>\n\n\n\n<p>Markets now assign <strong>less than a 50% probability<\/strong> of a <a href=\"https:\/\/t.co\/2IOwociXsq\" target=\"_blank\" rel=\"noopener\" title=\"\">BOJ rate hike in December<\/a>, with most expectations shifting toward <strong>March 2026<\/strong>.<\/p>\n\n\n\n<p>While stronger-than-expected <strong>producer price data<\/strong> for September added pressure on policymakers, the market consensus remains that the BOJ will prioritise financial stability and wage growth before tightening further.<\/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\">WATCH: Fast Retailing, Uniqlo&#39;s parent, posted a fourth straight year of record profit, driven by strong Japan sales and robust US results that offset higher tariffs <a href=\"https:\/\/t.co\/g6R87yxZSB\">https:\/\/t.co\/g6R87yxZSB<\/a> <a href=\"https:\/\/t.co\/Ublw2m6e3P\">pic.twitter.com\/Ublw2m6e3P<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1976316729971056668?ref_src=twsrc%5Etfw\">October 9, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The widening <strong><a href=\"https:\/\/t.co\/8EzmP5IOLL\" target=\"_blank\" rel=\"noopener\" title=\"\">U.S.-Japan yield differential<\/a><\/strong> continues to weigh on the yen, as U.S. Treasury yields remain elevated amid the Federal Reserve\u2019s cautious approach to rate cuts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The <strong>USD\/JPY<\/strong> pair is trading around <strong>152.95<\/strong>, slightly lower by <strong>0.09%<\/strong>, but still hovering near its highest level of the year as the yen weakens under persistent U.S. dollar strength.<\/p>\n\n\n\n<p>The pair\u2019s recent surge reflects the widening policy divergence between the <strong>Federal Reserve<\/strong> and the <strong>Bank of Japan (BOJ),<\/strong> with the Fed maintaining a cautious stance on rate cuts, while the BOJ continues to uphold ultra-loose monetary conditions despite rising domestic inflationary pressures.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/1_image-13-1024x448.jpg\" alt=\"\" class=\"wp-image-31898\" \/><\/figure>\n\n\n\n<p>From a <strong>technical standpoint<\/strong>, USD\/JPY remains firmly in bullish territory. The price is trading well above the <strong>5-, 10-, and 30-day moving averages<\/strong>, showing strong short-term momentum.<\/p>\n\n\n\n<p>The pair has broken through multiple resistance levels, including the previous ceiling near <strong>148.50<\/strong>, now acting as support. The <strong>MACD<\/strong> indicator supports this bullish view, with widening divergence between the MACD and signal lines alongside a growing histogram, signalling sustained buying momentum.<\/p>\n\n\n\n<p>However, traders should note that USD\/JPY is now entering a historically sensitive zone near <strong>153.00<\/strong>, where authorities in Tokyo have previously intervened to curb excessive yen weakness.<\/p>\n\n\n\n<p>This psychological resistance level could trigger verbal warnings or even market action from Japanese officials if volatility rises. A pullback from this level would likely see the pair retest <strong>147.80\u2013148.50<\/strong> as key support zones, where buying interest could re-emerge.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>While fundamentals support a stronger dollar in the near term, policymakers in Tokyo may grow increasingly uneasy with further yen depreciation. Verbal intervention or coordinated policy signals could emerge if the pair breaches <strong>\u00a5153<\/strong> convincingly.<\/p>\n\n\n\n<p>For now, traders are watching closely for any hints of BOJ discomfort or early signs of currency defence as the yen faces renewed downward pressure amid global uncertainty and Japan\u2019s shifting political landscape.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Create your live VT Markets account<\/a> and <a href=\"https:\/\/myaccount.vtmarkets.com\/login?_gl=1*5vyjdn*_gcl_au*Njc1MzM0NjY0LjE3NTEzNTM4MTc.*_ga*MjA5ODA0NDIzNC4xNzI3OTE1ODQ1*_ga_J26NL1ZVX7*czE3NTE4NzkxMDYkbzMwOCRnMSR0MTc1MTg3OTExOCRqNDgkbDAkaDA.*_ga_6XQ8153GYW*czE3NTE4NzkxMDgkbzU3JGcxJHQxNzUxODc5MTE4JGo1MCRsMCRoMA..*_ga_BG6LYEHPX1*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMTgkajUwJGwwJGgw*_ga_J8BRGZSREX*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_7CG6454YR5*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_69Z54R4H9N*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_CY2VCKFC3C*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjIkajQ2JGwwJGgw*_ga_TXZ07R2C21*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_17TMGY9BBE*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_MWDVVSEVL5*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_2QCC3S2748*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjUkajQzJGwwJGgw*_ga_E7D2PCX624*czE3NTE4NzkxMjYkbzUkZzAkdDE3NTE4NzkxMjYkajYwJGwwJGgw*_ga_XJ4037XKK6*czE3NTE4NzkxMjYkbzUkZzAkdDE3NTE4NzkxMjYkajYwJGwwJGgw*_ga_EJCVQDC7VT*czE3NTE4NzkxMDgkbzUkZzEkdDE3NTE4NzkxMjYkajQyJGwwJGgw\" target=\"_blank\" rel=\"noopener\" title=\"\">start trading<\/a> now.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yen sinks to \u00a5153 after Takaichi win fuels bets on more spending and loose policy. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":17043,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[10,45],"class_list":["post-31897","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-ca\/wp-json\/wp\/v2\/posts\/31897","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=31897"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/31897\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17043"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=31897"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=31897"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=31897"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}