The Japanese Yen has been quite volatile recently. What is the underlying logic? According to information close to the Bank of Japan, the probability of a rate hike in January is decreasing. This decision actually points more towards concerns about the exchange rate. The Bank of Japan is now facing a dilemma: continuing to tighten could push the Yen higher, but if they hold steady, they risk watching the Yen continue to weaken.

From a trading perspective, this attitude is very important. In the short term, every piece of news—whether it’s official statements or intervention rumors—can easily trigger fluctuations in the exchange rate. But in the long term, unless there is a fundamental change in the monetary policies of the US and Japan, the Yen’s depreciation pressure will not disappear. Structural changes happen slowly.

On the technical side, there is a key level to watch: the 158-160 range. This is not just a number but a psychological barrier. If the Yen continues to trade above this range against the US dollar, the probability of a downward move increases, and it will also significantly raise the likelihood of the Japanese government intervening again. This range is a watershed.