Yen Continues Downward Slide Amidst Bank of Japan Hesitation

The Japanese yen has been sliding as the Bank of Japan hesitates to raise interest rates aggressively. Treasury Secretary Scott Bessent is pushing for a sharp rate hike, but Prime Minister Sanae Takaichi opposes it.

This dichotomy has left the market uncertain about the future of monetary policy in Japan. The derivatives market now prices in only a 20% probability of another BoJ rate hike in October.

According to UBS, any new government intervention in the currency market could actually become a reason to sell the yen.