The Japanese Yen (JPY) is the top performing major currencies overnight. There is no fundamental trigger behind broad JPY strength, BBH FX analysts note.

BOJ policy rate to peak around 1.00% over the next two years

"Bank of Japan Deputy Governor Ryozo Himino reiterated the bank’s guidance that more hikes are in the pipeline if its economic and price outlooks are realized. Markets continues to imply the BOJ policy rate to peak around 1.00% over the next two years."

"This seems about right as the BOJ expects inflation to stabilize around its 2% target in 2026. Bottom line: the BOJ shallow policy normalization cycle is an ongoing headwind for JPY."