Japanese Yen and BoJ Policy💱 Forex•USD/JPY

Yen Weakness Persists Amid BoJ Rate Hike Uncertainty & Strong Dollar

February 20, 2026, 06:01 AM157 words10 sources
USD/JPY
Yen Weakness Persists Amid BoJ Rate Hike Uncertainty & Strong Dollar

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The Japanese Yen remains under pressure against the US Dollar, trading near a one-week low around 155.00, driven by a combination of factors. Recent US economic data and hawkish signals from the FOMC minutes – revealing a divided committee but no immediate rush to cut rates – have bolstered the Dollar. Simultaneously, cooling inflation in Japan, with the National CPI falling to 1.5% year-on-year in January, is tempering expectations for an early BoJ policy shift. While markets still assign a roughly 80% probability to a rate hike in April, concerns about Japan’s fiscal health and weak Q4 GDP growth are weighing on the Yen. DBS Research highlights the Yen’s significant undervaluation, suggesting recovery potential, but acknowledges that BoJ monitoring and political developments may curb speculation. MUFG notes JGB support cushions the Yen’s downside. Divergence in monetary policy between the BoJ and the Fed remains a key driver of Yen weakness, though geopolitical tensions offer some limited support.

Source Articles

This article is based on analysis of 10 source articles from our news database.

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