The yen has continued to trade at weaker levels during the Asian trading session with USD/JPY hitting a fresh intra-day high of 134.56 as it moves closer to the high from back in 2002 at 135.15. Yen weakness’ is set to extend further on a break above the latter, economists at MUFG Bank report.

BoJ’s contrasting stance with other major central banks leaves JPY vulnerable to further weakness

“The BoJ’s contrasting stance with other major central banks leaves the yen vulnerable to further weakness in the near-term at least while the sell-off in global equity markets has paused for now.”

“Yen weakness is likely to accelerate further if USD/JPY breaks above 135.15. BoJ Governor Kuroda is not convinced though that there is much further room for the USD/JPY to continue marching higher unless the Fed to delivers faster and more rate hikes than currently planned.”