Fed Confirms Rate Meeting Schedule Despite Severe Winter Storm in Washington D.C. 
New York Fed President John Williams Signals Rate Hold as Economy Seen Strong in 2026 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
Bank of Japan Signals Cautious Path Toward Further Rate Hikes Amid Yen Weakness 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
After strengthening to as high as 108.8 per dollar, the Japanese yen has weakened for a fourth consecutive week now and is down around 450 pips since the last peak. It is currently trading at 113.2 per dollar. Most importantly, the majority of the weakness came amid a weaker dollar, which has pushed the yen further against its other major trading counterparts. Since the above-mentioned peak, the yen has declined around 800 pips against the pound and 1360 pips against the euro, making it the worst performing G10 currencies since April.
Is yen a victim of lack of risk aversion?
While a lack of a major risk aversion played its part, the yen has basically become the victim of the Bank of Japan’s (BoJ) ‘last man standing’ policy. While we think that the BoJ has taken preparations in reducing its monetary easing when it introduced the ‘yield curve control’, it has so far signaled no indication of winding up its extraordinary monetary stimulus.
While BoJ hasn’t changed its policy or made any major changes to its statements, but its dovish monetary policy received additional attention as the US Federal Reserve hiked interest rates twice this year, BoE indicated that the next move could be a rate hike with three dissenters at the last meeting, and the European Central Bank (ECB) has signaled winding up monetary stimulus in recent commentaries.
