Kevin Zhao, a portfolio manager at UBS Asset Management, views potential future interventions by Japanese authorities as opportunities to sell the yen. He argues that the recent policy shift does not indicate a sustained hawkish trend, suggesting the currency's structural weakness persists.
The Bank of Japan raised its policy rate by 25 basis points to 1.25% on September 18, marking the highest level since April 1995. The decision passed with a 7-2 vote, as members Toichiro Asada and Ayano Sato dissented, preferring to keep rates steady.
Following the announcement, the yen traded in the 157-159 range against the dollar. On July 31, 2026, Japan and the US conducted a joint yen-buying intervention, the first such coordinated effort in 15 years. Total currency interventions in 2026 have exceeded $100 billion.
The internal division within the central bank regarding the pace of tightening has led market participants to doubt the sustainability of a hawkish narrative. Analysts are now monitoring whether Governor Kazuo Ueda can build consensus for further rate hikes at upcoming meetings.
