USD/JPY consolidates near 152 – BBH

USD/JPY is consolidating just under yesterday’s intra-day high of 152.17. Japan’s top trio – Prime Minister Takaichi, Finance Minister Katayama, and Economy Minister Kiuchi – all stressed the Bank of Japan’s (BOJ) independence, BBH FX analysts report, BBH FX analysts report.

Japan leaders affirm BOJ independence

“Long-term JGB yields remain steady. PM Takaichi has ordered a fresh package of economic measures that is likely to exceed last year’s ¥13.9 trillion (2.2% of GDP) supplementary budget to help households tackle inflation.”

“We anticipate the BOJ to resume normalizing rates next week or at the very least deliver a hawkish hold which can turbocharge JPY. Fiscal support is set to be ramped-up, the Tankan points to an ongoing recovery in real GDP growth and underlying inflation is making good progress towards the BOJ’s 2% target. Japan’s September CPI print is due tomorrow.”

“Japan’s swaps market price-in just 10% odds of a 25bps rate hike to 0.75% at the October 30 meeting and nearly 40% probability of a hike by December. A full 25bps rate increase is priced-in over Q1 2026.”