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Yen strengthens versus dollar ahead of BoJ decision

Markets are fully pricing a 25 basis point BoJ hike on September 18, with USD/JPY drifting toward 153 support and 2026 lows near 152.

Reported · Written up by our desk · Major Pairs

Scotiabank strategists Shaun Osborne and Eric Theoret said the Japanese yen has been outperforming the US dollar, pushing USD/JPY down toward key support around 153 and the 2026 low near 152. They also noted that resistance is seen around 155 as positioning in the currency is viewed as increasingly offside.

The outlook is tied to expectations for the Bank of Japan, with markets fully pricing a 25 basis point hike on September 18. Scotiabank flagged risks skewed toward further yen gains, citing the prospect of continued normalization of Japanese monetary policy.

In the FXStreet coverage, USD/JPY briefly slipped but later traded back above 153.50 during the American session. The dollar rebound was attributed to a US Treasury buyback announcement, even as solid Japanese data reinforced expectations that the BoJ will keep normalizing.

FXStreet also said the yen theme has supported broader dollar moves, while traders look ahead to US inflation figures later in the week for fresh impetus. Separately, gold rebounded and reclaimed the $4,400 per troy ounce area as dollar selling pressure eased and uncertainty persisted on the geopolitical front.

Latest closeGold $4,395.60 ▼0.8%|USD/JPY 153.54 ▼0.2%

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