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2025-10-28 18:22:27
Yen rebounds strongly above 152, raising hawkish expectations for the Bank of Japan (BOJ) (1) The yen was the best performing currency today, with USD/JPY falling below the key 152.00 level after forming a double top technical pattern at 153.25. (2) Japanese Growth Strategy Minister Toshifumi Kiuchi expressed continued concern about the economic impact of a weak yen, suggesting authorities are concerned about the pace and magnitude of depreciation. (3) The market expects the Bank of Japan to maintain its interest rate at 0.50% this week, but swap market pricing suggests a near 50% probability of a rate hike before December, with a 25 basis point hike fully priced in for the first quarter of 2026. (4) Core inflation continues to exceed the 2% target and is above the Bank of Japan's forecast, creating conditions for the Bank of Japan to normalize its policy, coupled with a new economic stimulus package exceeding 13.9 trillion yen.
