Scotiabank strategists Shaun Osborne and Eric Theoret highlight ongoing Japanese Yen (JPY) outperformance, with USD/JPY drifting toward key support near 153 and the 2026 low around 152. Markets fully price a 25 bp Bank of Japan (BoJ) hike on September 18. They see risks tilted to further Yen gains as positioning looks increasingly offside and resistance now comes in around 155.
Upside risk for JPY as BoJ looms
“The JPY is outperforming with a modest 0.2% gain and clearly ignoring the terms of trade implications of the latest rally in oil prices.”
“Risk for the JPY remains firmly tilted to the upside as market participants assess the state of sentiment and positioning that look increasingly offside in a market that has shifted from official intervention support and evolved to fundamentally-driven BoJ-led gains.”
“Data releases have been limited and the calendar remains relatively empty into the end of the week, offering little in terms of event risk ahead of the BoJ decision on September 18th—where a 25bpt rate hike is fully priced.”
“For USD/JPY, recent price action leans toward support around 153 as we note the absence of any additional support ahead of the 2026 low near 152.”
“In terms of resistance we now expect it at 155, given its role in providing prior support.”