News & Analysis

USDJPY Analysis – Yen under pressure as the BOJ keeps rates and policy unchanged

22 September 2023 By Lachlan Meakin


In a bit of an anti-climax in an exciting week in Central Bank action for FX traders today saw the BoJ keep the status quo of an ultra-accommodative monetary policy as expected. But disappointing the Yen bulls was the BoJ offering no clear sign of a shift in its policy stance in the near term after some speculation a clearer hint to normalization of policy could be given at this meeting.

This saw re-positioning in USDJPY putting pressure on the yen and spiking the USDJPY higher into the intervention zone where the Japanese Ministry of Finance forcefully entered the FX market late in 2022.

This is setting up as a real game of chicken between the markets and the Bank of Japan , with policy BoJ policy on hold for the foreseeable future, the grind higher in USDJPY seems inevitable while rate differentials between US10Y and JP10Y yields also continue to rise. The close relationship between this differential and USDJPY can be seen on the following chart.

Without a change in rates policy, FX intervention is looking like it may be the only way for this trend to change course and with comments like the below from Japanese Finance Minister Suzuki today we may see it sooner rather than later.

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