Yen Stability Ahead of BoJ Meeting

The Japanese Yen has been relatively stable against the US Dollar, trading between 158.00 and the upper 159s in the USD/JPY pair. However, market attention is shifting from past intervention to fundamentals ahead of the September 18 BoJ meeting.

According to Scotiabank strategists Shaun Osborne and Eric Theoret, about 20 bps of tightening is priced for the BoJ meeting, offering some scope for near-term JPY strength. This means that investors are now focusing on the central bank's tone as policymakers manage expectations for the rate path into year-end and into early 2027.

The market narrative has shifted from official intervention to fundamentals, with participants tightening their focus on the BoJ meeting. The price action in USD/JPY has been relatively muted, with support bound between 158.00 and resistance in the upper 159s.