Yen Gains Traction as Risk Aversion Rises, but BOJ Outlook May Cap Upside

The Japanese yen is back in the spotlight as investors shift toward safe-haven assets amid mounting uncertainty in U.S. equities and renewed volatility in the dollar. The move reflects broader defensive positioning in global markets, with risk appetite fading across both stocks and high-yield currencies.

Policy Outlook in Focus

The International Monetary Fund has suggested that the Bank of Japan may postpone additional rate hikes, a stance that could temper the yen’s longer-term rally. While analysts note that yen strength is not yet stretched from a positioning standpoint, a persistently dovish BOJ limits the scope for sustained appreciation.

Technical Levels

Market participants are closely watching near-term levels: support is seen around 140.00, while resistance looms near 144.80. A break above the latter could spark fresh momentum toward 146.50, though without clear policy support, any upside may face headwinds.

Looking Ahead

Attention now turns to the upcoming meeting between Japan’s Finance Minister Kato and U.S. Treasury Secretary Bessent later this week. Traders expect the talks could provide fresh clues on currency coordination, intervention risk, and broader policy alignment between Washington and Tokyo.