The Japanese Yen exchange rate hits a 9-month low as expectations of a rate hike shift again

The Bank of Japan's monetary policy direction has become the focus of market attention. Recently, the Yen has continued to weaken, with USD/JPY hitting new highs repeatedly, reflecting the market's re-pricing of expectations for Japan's monetary policy adjustments.

**Policy signal shift, rate hike timetable delayed**

Japanese Prime Minister Fumio Kishida recently made new statements regarding the central bank's policy direction, emphasizing the need for cautious progress in interest rate adjustments. His economic advisor, Takashi Wada, explicitly suggested that the Bank of Japan should postpone its planned rate hikes for the year, waiting at least until January next year to initiate policy tightening. This shift in policy stance quickly transmitted to the market, directly weakening the safe-haven demand for the Yen.

At the same time, the easing of the U.S. government shutdown crisis has also acted as a catalyst. On November 10, the U.S. Senate passed a temporary funding bill, dispelling uncertainty, and the previous safe-haven sentiment dissipated accordingly, further increasing the selling pressure on the Yen.

**Institutions raise USD/JPY target prices**

International financial institutions are systematically adjusting their forecasts for the Yen's movement. Based on the judgment that the BOJ's rate hike will be delayed, JPMorgan economists have significantly raised their outlook for USD/JPY: the end-of-2025 target has been raised from 142 to 156, and by March 2026, they expect it to reach 152 (original target 139).

Mizuho Securities has also raised its expectations, predicting USD/JPY will surge to 156 by the end of 2025, and further rise to 158 by March 2026. The formation of a consensus among institutions further reinforces the market's recognition of a Yen depreciation trend.

**Policy uncertainty continues to exert pressure**

Market analysts believe that until Prime Minister Fumio Kishida's proactive fiscal stimulus plan is finally implemented (expected to be finalized by November 21), market caution regarding policy direction will be difficult to dispel. Mitsubishi UFJ Bank analysts pointed out that uncertainty over the size of the budget could easily trigger continued selling pressure on the Yen, which will be an important variable affecting Yen movement in the future.

The current Yen exchange rate has fully reflected market expectations of delayed central bank policy and expanded fiscal stimulus, and short-term Yen depreciation pressure is unlikely to ease.