Why Hawkish BoJ Signals and Intervention Risk Have Not Reversed the Yen Weakness

244 Views05 Feb 2026 16:01

SUMMARY

Despite hawkish guidance and hints of further hikes, the yen weakened 1% after December and 0.5% after January, signaling that markets see policy as insufficient.
Yen strength on 23/Jan was driven by a New York Fed spot check rumor, not BoJ policy; without actual intervention, history shows weakness typically resumes.
A >1% rise in the Dollar Index on prospects of a hawkish Fed Chair has removed a key support, turning USD strength into an active headwind for the yen.

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