Live Updates > Live Update Details
2026-09-21 18:30:12
[Yen Under Pressure and Volatility Increases, Intervention Risk Rises] ⑴ The yen fell more than 2% last week, its biggest weekly drop in nearly a year, and its performance this week may be volatile. ⑵ Japan's three-day holiday ending Wednesday will reduce market liquidity, potentially amplifying yen volatility and increasing the impact of official intervention. ⑶ Reports indicate that officials conducted exchange rate checks last Friday, raising the risk of intervention. ⑷ Japan used a record 15 trillion yen for intervention in the month ending August 26. ⑸ The Bank of Japan raised interest rates to 1.25% last Friday but did not provide clear guidance on the pace of future rate hikes. ⑹ The market is currently pricing in a less than 20% probability of another rate hike in October, and nearly 90% in December. ⑺ The yen strengthened earlier this month due to expectations of faster tightening by the Bank of Japan, the unwinding of yen carry trades, and the potential shift of Japanese pension funds to domestic assets. ⑻ This momentum has weakened as the Federal Reserve also raised rates, with markets concerned that the Bank of Japan may struggle to keep pace with the US tightening. (9) The yen is under renewed pressure, and we need to pay close attention to official intervention and central bank policy signals.
