Forex
USD/JPY Surges Amid Hawkish Fed and Dovish BoJ, Intervention Risk Lingers
The USD/JPY exchange rate posted its strongest weekly gain since October 2025, driven by a hawkish Federal Reserve and a dovish Bank of Japan.
The five-day correlation with US two-year yields surged to +0.98, indicating a strong positive relationship between the pair and front-end US rates.
A suspected rate check from Japanese authorities near 158 revived the risk of intervention activity, particularly given the prolonged holiday period in Japan and thin market conditions.