Japanese yen soars as Ueda says BoJ could raise rates

The Japanese yen has roared out of the gates on Monday and gained 1% against the US dollar. In the European session, USD/JPY is trading at 146.34.

Ueda says negative rates could end

The yen has been on a dreadful slide and dropped close to the 148 line last week. USD/JPY rose 1.07% last week and the greenback appeared to have momentum on its side. That upswing to a rude crash as the yen regained almost all of last week’s losses on Monday, following comments from Bank of Japan Governor Ueda over the weekend.

Ueda said in a newspaper interview that the BoJ could have enough data on wage growth by the end of the year to determine whether it can end negative rates. This was not a signal that Ueda was changing policy, as the Governor reiterated in the interview that the BoJ would “patiently” maintain its ultra-loose policy. Still, the fact that Ueda said that the BoJ could eventually raise rates was enough to send the yen flying higher on Monday.

Ueda’s remarks came after a series of hawkish comments by BoJ members in recent weeks, suggesting that the central bank is preparing the markets for a policy shift. Inflation has consistently been higher than the BoJ’s target of 2% and put into question the BoJ’s stance that inflation is not sustainable.

Ueda may have also intended to take a swipe at the strong US dollar, which has pummeled the yen. Last week, Vice Finance Minister Kanda, who is Japan’s currency diplomat, warned that the authorities “will not rule out any options on currencies if speculative moves persist” and Ueda’s remarks can also be viewed as verbal intervention to prop up the Japanese currency. Tokyo resorted to currency interventions late last year and could step in again if the yen keeps losing ground.


USD/JPY Technical

  • USD/JPY has pushed below support at 147.24 and 146.61. Below, there is support at 145.40
  • 148.45 and 149.08 are the next resistance lines

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including Investing.com, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all)