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JPY LIKELY TO DEPRECIATE AFTER UEDA’S APPEARANCE TODAY

ADMIN || 1st December 2025

The yen is set to grind lower as BOJ Governor Ueda’s appearance on Monday is likely to stick with the recent template and infer that more time is needed to assess economic conditions before raising interest rates. Should that be the theme today, it would reinforce the prevailing narrative of the yen as a currency that traders are comfortable shorting against G-10 peers.

Japan’s currency will similarly struggle should Ueda repeat that the likelihood is gradually increasing for the central bank’s economic and price outlook to be realized.

Investors will see comments in that vein as an excuse to defer a hike, despite recent economic data suggesting one is already overdue. That would amplify the yen’s negative real rates scenario.

There is a Tankan report to come before the BOJ meets this month, but investors still need to hear Ueda coaxing the rest of the board into raising rates before they will be convinced that December’s won’t be another damp squib. Given only two BOJ members called for an immediate hike in October, that means there are several more who need persuading the time is ripe for action.

In the surprise event that Ueda hits all the right hawkish notes, USD/JPY could make a swoon lower into the 150-152 zone. However, traders won’t be too excited about the yen staging a long recovery as rate hikes under Ueda have been spread out. So even if there is a 25-bp bump this month, the next increase is likely to be too many months away for the yen to get excited.

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