Risk aversion drives up the yen exchange rate, and the market is paying attention to signals of intervention from the Bank of Japan

【 June 7, 2025 | Tokyo 】 | | | Against the backdrop of global stock market pressure and the influx of safe haven funds, the Japanese yen | | | | as a traditional safe haven currency is being sought after.
The US dollar against the Japanese yen fell to around 155.90 in early Asian trading on Friday, hitting the lowest point of the week and recording a second consecutive day of decline. Analysts point out that although the Federal Reserve has been adopting a wait-and-see attitude recently, market uncertainty is increasing, including fluctuating global inflationary pressures, geopolitical tensions, and slowing economic growth in Europe and the United States. These factors have collectively driven up the demand for safe haven assets in the market, with the Japanese yen performing particularly well. At the same time, the market is highly concerned about the potential intervention actions of the Bank of Japan. Previously, officials from the Japanese Ministry of Finance have repeatedly expressed their dissatisfaction with the rapid fluctuations in the exchange rate. Foreign exchange traders generally believe that 155.00 is a sensitive psychological threshold, and once it is breached, it may trigger policy reactions. From a technical perspective, if the US dollar falls below 155.50 against the Japanese yen, it may open up downward space to 154.30. If the short-term rebound is limited, the future market will test the long-term moving average support. Investors will closely monitor the upcoming Japanese GDP correction data to be released next week, as well as statements from central bank officials, in search of policy signals and market direction.

Mayu Sakamoto (| | | Senior Strategist in the Japanese Market | | |) ✍️ Author: | | | Mayu Sakamoto | | | | | | |