USD/JPY: Yen pressured as BoJ delay seen – MUFG

The USD/JPY has come under upward pressure as market expectations grow that the Bank of Japan will delay any near-term policy tightening, according to MUFG. This perception is reinforcing the existing interest rate differential advantage of the U.S. dollar over the yen, supporting dollar strength. The yen remains particularly vulnerable to shifts in global risk appetite and divergent monetary policy trajectories, with Japanese government bond yields remaining anchored despite rising global yields. With the BoJ expected to maintain ultra-loose policy amid subdued inflation momentum, capital flows favor yield-seeking assets denominated in higher-yielding currencies like the USD. Traders will focus on Japan’s upcoming core CPI data and the BoJ’s quarterly tankan survey as key near-term catalysts for policy clues.

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