The Yen’s Stubborn Weakness Defies BOJ Tightening, Creating a Two-Speed Dynamic for Japanese Assets
The Japanese yen began 2026 trading near 157 to the U.S. dollar, a level that confounds the straightforward narrative that Bank of Japan rate hikes should strengthen the currency. The BOJ raised its policy rate to 0.75% in December, the highest in three decades, yet the yen has barely responded. The disconnect between a tightening…