USD/YEN Update 5 December 2025

11 day bull flag

Yields have surged but with that there has been good 10 year and 30 year auctions. The BoJ meets on 19 December and they’re preparing us for a rate hike. Japanese inflation is above target but under control, yields are still too low though and that’s why short rates are going up. Seems reasonable to me.

Despite all the prophecies of the end of the financial world, oblivion is on Monday, I actually think the MoF and BoJ have done a good job. More YEN weakness and still higher yields are needed just to normalise the Japanese economy. The rhetoric around YEN being too weak is just keeping markets orderly.

We’ll still long USD/YEN and looking for price to break higher out of the bull flag. Our stop is still just below 152.80 so we’re always in the money.