{"id":38922,"date":"2026-01-13T11:08:35","date_gmt":"2026-01-13T03:08:35","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=38922"},"modified":"2026-01-13T11:08:35","modified_gmt":"2026-01-13T03:08:35","slug":"usdjpy-hikes-as-political-risks-weigh-on-yen","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/usdjpy-hikes-as-political-risks-weigh-on-yen\/","title":{"rendered":"USDJPY Hikes as Political Risks Weigh on Yen"},"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\/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 climbed beyond 158, marking the yen\u2019s weakest level in a year.<\/li>\n\n\n\n<li>Political uncertainty and unclear BOJ timing continue to undermine the currency.<\/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 weakened past 158 per dollar on Tuesday, pushing USDJPY to its highest level in a year. The move reflected rising political uncertainty in Japan, as speculation grew that <strong>Sanae Takaichi<\/strong> could dissolve parliament as early as next month.<\/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 plans to dissolve parliament with possible snap election in February: NHK <a href=\"https:\/\/t.co\/gZnnzDNt18\">https:\/\/t.co\/gZnnzDNt18<\/a><\/p>&mdash; CNBC (@CNBC) <a href=\"https:\/\/twitter.com\/CNBC\/status\/2010560625189986442?ref_src=twsrc%5Etfw\">January 12, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Markets view the potential move as a path toward expansionary fiscal policy, with Takaichi expected to capitalise on strong public approval.<\/p>\n\n\n\n<p>Expectations of looser fiscal settings tend to pressure the yen by increasing supply concerns and widening Japan\u2019s policy divergence with other major economies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Officials Step Up Verbal Warnings<\/h2>\n\n\n\n<p>Concerns over the pace of yen depreciation prompted renewed verbal intervention from Japanese officials.<\/p>\n\n\n\n<p>Finance Minister <strong>Satsuki Katayama<\/strong> said she and US Treasury Secretary <strong>Scott Bessent<\/strong> shared concerns about the yen\u2019s \u201cone-sided depreciation\u201d during a bilateral meeting held alongside a multilateral finance ministers\u2019 gathering.<\/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 and US Treasury Secretary Scott Bessent shared concerns about the weakening yen during a bilateral meeting as the currency edged toward a key threshold where authorities have intervened in the past <a href=\"https:\/\/t.co\/el2QVQwBT1\">https:\/\/t.co\/el2QVQwBT1<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2010868056625414371?ref_src=twsrc%5Etfw\">January 13, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Katayama also <a href=\"https:\/\/t.co\/THF4hBTIzQ\" target=\"_blank\" rel=\"noopener nofollow\" title=\"\">highlighted tensions with China<\/a>, citing Beijing\u2019s export restrictions on items critical to Japan\u2019s military, including key minerals.<\/p>\n\n\n\n<p>These geopolitical and trade-related risks add another layer of uncertainty for the yen, even as officials attempt to slow speculative selling through rhetoric.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">BOJ Policy Path Remains Unclear<\/h2>\n\n\n\n<p>On the monetary side, markets remain divided over when the <strong>Bank of Japan<\/strong> might deliver its next interest rate hike. Recent data releases have offered mixed signals, leaving traders without a clear anchor for policy expectations.<\/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\">The Bank of Japan is likely to raise its economic growth projection when its board meets later this month <a href=\"https:\/\/t.co\/ea6XYOG0h6\">https:\/\/t.co\/ea6XYOG0h6<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/2009524079150149901?ref_src=twsrc%5Etfw\">January 9, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>While the BOJ has already moved away from ultra-loose policy, the absence of firm guidance on timing or pace has limited support for the yen. As long as US yields remain elevated relative to Japanese rates, USDJPY continues to attract carry-driven flows.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>USD\/JPY remains firmly in an uptrend, supported consistently by the 10-day and 30-day moving averages. After weeks of consolidation just under 158, the pair has now broken higher, threatening a fresh leg upward into multi-month highs.<\/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\/image-5-1024x450.jpg\" alt=\"\" class=\"wp-image-38928\" \/><\/figure>\n\n\n\n<p>The trend is clearly bullish, with no major resistance in sight until the psychological 160 level.<\/p>\n\n\n\n<p>The MACD has turned decisively bullish again, with a fresh crossover and rising histogram bars supporting renewed upside momentum.<\/p>\n\n\n\n<p>As long as price holds above 157.50, the bulls remain in control. A daily close above 158.50 could accelerate the rally.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Near-Term Outlook Hinges on Politics and Policy<\/h2>\n\n\n\n<p>The yen remains vulnerable as long as political uncertainty and policy ambiguity persist.<\/p>\n\n\n\n<p><a href=\"https:\/\/t.co\/wFuOsWIamq\" target=\"_blank\" rel=\"noopener nofollow\" title=\"\">Verbal warnings<\/a> may slow the pace of depreciation, but without a clearer signal from the BOJ or concrete action from authorities, downside pressure is likely to linger.<\/p>\n\n\n\n<p>In the near term, traders will watch closely for developments around parliament, further comments from finance officials, and any shift in tone from the BOJ that could alter expectations around Japan\u2019s rate path.<\/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 hits a one-year high above 158 as political uncertainty and policy ambiguity pressure the Japanese 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-38922","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\/38922","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=38922"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38922\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17051"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}