Japan's Yen Rally Accelerates as Dollar Weakness Continues

The Japanese Yen has seen significant gains against the US Dollar in recent days, driven by expectations of Bank of Japan tightening and GPIF flows. ING strategists argue that this rally is also supported by thin US holiday liquidity, which amplified the sell-off in USD/JPY.

The pair broke through the key 155.0 level before extending to 153.0 overnight, with Francesco Pesole, Frantisek Taborsky, and Chris Turner seeing further downside risks for USD/JPY towards 152.0 and 150.0.

They warn that current volatility makes it too risky to fight the move, even as broader USD sentiment could improve.