Bank quotes reporter test with title fix - 3

Yen shows tentative strength as policy signals remain unclear

Scotiabank reports that the Yen is finally showing signs of life, noting that “the yen is strong, up 0.4% vs. the USD and outperforming all of the G10 currencies into Friday’s NA session, showing its first attempt at material strength following last week’s ‘alleged’ official action.” From a technical perspective, Scotiabank adds that “for USDJPY, we have seen a meaningful moderation in bullish momentum with the RSI fading back toward 50,” suggesting a more balanced near-term backdrop for the pair.

On the policy side, MUFG/BTMU analysts remain cautious about reading too much into recent official comments. They stress that “while we certainly view this as potentially meaningful, we still have only had this comment made by Finance Minister Katayama at a regular press conference and hence to what extent any formal policy is being compiled is unclear.” In their view, “we think firstly we would need to see this cited more regularly as something being looked at from a policy perspective with the MHLW then formulating an updated objective.” MUFG/BTMU also highlight the potential scale of any eventual shift in domestic investment, noting that “based on the total value of investment assets held at the end of FY2025 there was room to increase allocations to domestic assets (bonds & equities) by just under JPY34 trillion.”