When will the depreciation pressure on the Japanese Yen ease? The numbers are in front of us

The Bank of Japan continues to raise interest rates, yet the Yen remains immovable. Market participants are increasingly seeing clearly — this is not a problem that can be simply reversed by policy. JPMorgan Chase and BNP Paribas are both warning: the widening US-Japan interest rate gap, deeply negative real interest rates, and continuous capital outflows—these three mountains could push the Yen to depreciate to 160, 164, or even break through 165 by the end of 2026.

Look at this year's performance — the Yen has only appreciated by less than 1%. The rebound in April was short-lived and was quickly wiped out by expectations of tariffs under Trump. Currently, the trading price is around 155.70, approaching this year's lowest point. The arbitrage trades are starting to pile up again, and leveraged funds betting against the Yen have hit a seven-month high.

How is capital flowing? Retail investors are pouring money into overseas assets, companies are busy with cross-border M&A, and money is continuously flowing out. The hawkish stance of the Federal Reserve has become a ballast, further fueling the trend.

Will intervention policies come into play? Central bank officials have been vocal recently, making various statements. But frankly, words alone cannot withstand this wave of depreciation. Where is the real turning point? It depends on how the upcoming policy directions unfold.