DBS: USD/JPY Has Peaked for This Cycle Amid Anticipated BoJ Policy Shifts
DBS Group Research strategist Chang Wei Liang reiterates that USD/JPY has likely peaked for this cycle, with the pair retreating toward 153. This trend is linked to anticipated Bank of Japan policy shifts, which are expected to impact the Japanese Yen's strength.
The recent US-Japan intervention and comments from Treasury Secretary Bessent suggest a high likelihood of meaningful Japanese policy changes. BoJ's Takata raised the possibility of back-to-back rate hikes last week, while Japan's GPIF unexpectedly called for a meeting in late August to discuss asset allocation, which could signal a reallocation from foreign to JPY assets.
According to Bessent, the success of his JPY market intervention was due to asymmetric information. Whether a new JPY appreciation trend has begun will depend critically on the policy guidance that BoJ delivers next Friday.