Japanese Yen (JPY) is the top performing currency today. USD/JPY dipped under 152.00 after forming a double-top around 153.25. JPY strength coincided with comments by Minoru Kiuchi, minister for growth strategy. Kiuchi said he will keep monitoring the weak yen’s impact on the economy, suggesting authorities are uncomfortable with the pace or level of depreciation, BBH FX analysts report.

BOJ likely to deliver hawkish hold this week

"Attention now turns to Thursday’s Bank of Japan (BOJ) policy decision. The BOJ is expected to keep rates on hold at 0.50%. The swaps market price in just 12% odds of a 25bps rate hike this week and nearly 50% probability of a hike by December. A full 25bps rate increase is priced-in over Q1 2026."

"We anticipate the BOJ to resume normalizing rates this week or at the very least deliver a hawkish hold which can further lift the beleaguered JPY. Fiscal support is set to be ramped up and the Tankan points to an ongoing recovery in real GDP growth. Japan’s Prime Minister Takaichi ordered last week a fresh package of economic measures that is likely to exceed last year's ¥13.9 trillion (2.2% of GDP) supplementary budget to help households tackle inflation."

"Moreover, Japan core inflation remains well above the BOJ’s 2% target and tracking above its projection. In July, the BOJ projected core ex. fresh food and core ex. fresh food & energy CPI to average 2.7% and 2.8% in 2025, respectively. New sets of macroeconomic projections are due at this upcoming meeting."