The yen is underperforming again with the break to new highs in USD/JPY encouraging continued selling. Economists at MUFG Bank expect the yen to remain under pressure if US yields stay resilient.

Kuroda keeps to dovish message as USD/JPY hits new highs

“The speed of the move in yen depreciation is certainly now on a par with what we had during much of March and April and at higher levels there will be inevitable increased speculation on Japan intervention to at least slow the move.”

“Governor Kuroda did say today that rapid yen selling is ‘undesirable’ but it would be difficult at this juncture for the MoF to justify yen buying intervention given the actions of the BoJ.”

“If US yields remain underpinned over the short-term yen selling momentum will likely persist.”