USD/YEN Update 2 December 2025

All the FUD in one place

Japanese 10 year yield hits 1.88% - not seen since 2008. And X goes mad with Japan bringing the global financial system down and BoJ pre-warning us that they’re going to hike rates on 19 December.

We’re still long USD/YEN and price action looks to move into a bull flag. Only below 152.80 would our view change.

Thinking is

• BoJ have been trying to hike rates for ages but too scared

• YEN carry trade got carried out some time ago

• YEN is weakening until foreign buyers are found for JGBs

• Inflation 2.5% so yield can move at least 1% higher, during which YEN will weaken further.

• BoJ won’t intervene in FX unless it gets disorderly.