- Investors are returning to the yen as a safe haven amid growing uncertainty around U.S. equities and the dollar.
- The IMF expects the Bank of Japan to delay further rate hikes, which could limit the yen’s ability to sustain its recent rally.
Amid growing uncertainty surrounding U.S. equities and the US dollar, investors could be returning to a traditional defensive strategy: going long on the Japanese yen.
While some analysts believe the recent yen rally is not yet overstretched, the International Monetary Fund (IMF) has noted that Japan’s central bank is likely to push back the timing of further interest rate hikes, a factor that could limit the yen’s potential to strengthen further. As such, we are looking at the support level of 140.00, the bearish-yen sentiment seen today, and the potential resistance at 144.80.
Up next: a scheduled meeting between Japan’s Finance Minister Kato and U.S. Treasury Secretary Bessent later this week.
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