Fitch said that the Bank of Japan may need to raise policy interest rates to support the yen's further appreciation Fitch's report was released after the US and Japan coordinated intervention in the exchange rate and Bank of Japan Governor Ueda Kazuo sent a “hawkish signal.” These factors have pushed the USD/JPY exchange rate to 156 at the end of 2026, as predicted by Fitch. Fitch said that the weakening yen “does not seem to be mainly due to the relative positions of the monetary policies of the US and Japan,” adding that future interest rate spreads mean that the yen will strengthen. Fitch said, “It is expected that the Bank of Japan will wait until October to raise interest rates, and the rate hike will be faster than market expectations,” which will support the yen, but it is unlikely that the yen will rise back to 2019 levels. The report warns that “any opinion that the Bank of Japan is slow to act may trigger a new round of weakness.”

Fitch said that the Bank of Japan may need to raise policy interest rates to support the yen's further appreciation Fitch's report was released after the US and Japan coordinated intervention in the exchange rate and Bank of Japan Governor Ueda Kazuo sent a “hawkish signal.” These factors have pushed the USD/JPY exchange rate to 156 at the end of 2026, as predicted by Fitch. Fitch said that the weakening yen “does not seem to be mainly due to the relative positions of the monetary policies of the US and Japan,” adding that future interest rate spreads mean that the yen will strengthen. Fitch said, “It is expected that the Bank of Japan will wait until October to raise interest rates, and the rate hike will be faster than market expectations,” which will support the yen, but it is unlikely that the yen will rise back to 2019 levels. The report warns that “any opinion that the Bank of Japan is slow to act may trigger a new round of weakness.”