The post Japanese Yen recovers amid BoJ rate hike bets, risk-off mood appeared on BitcoinEthereumNews.com.

The Japanese Yen (JPY) attracts some buyers during the Asian session on Friday and, for now, seems to have snapped a five-day losing streak against its American counterpart, reaching a two-week low the previous day. Traders remain on high alert amid the possibility of a coordinated Japan-US intervention to stem the JPY’s decline. This, along with a turnaround in the global risk sentiment and a rise in volatility, benefits the JPY’s safe-haven status. Moreover, hawkish Bank of Japan (BoJ) expectations turn out to be another factor underpinning the JPY. Meanwhile, data released earlier today showed Japan’s Household Spending fell sharply in December, underscoring the drag from higher prices on consumer activity and reinforcing expectations for an earlier BoJ rate hike. However, growing concerns over Japan’s fiscal situation and political uncertainty might hold back the JPY bulls from placing aggressive bets. Furthermore, the recent strong US Dollar (USD) recovery momentum from a four-year low could limit the downside for the USD/JPY pair ahead of Japan’s snap lower house election on February 8. Japanese Yen benefits from hawkish BoJ expectations and a turnaround in risk sentiment Data released earlier this Friday showed that Household Spending in Japan declined 2.6% YoY in December 2025, marking a sharp contraction after a 2.9% rise in the previous month. This suggests that elevated living costs are weighing on consumption, reinforcing the Bank of Japan’s resolve to counter inflation and backing the case for an early interest rate hike. In fact, the Summary of Opinions from the BoJ’s January meeting, released earlier this week, showed that policymakers debated mounting price pressures from a weak Japanese Yen. Moreover, board members judged that further interest rate increases were appropriate over time. This assists the JPY to gain some positive traction during the Asian session on Friday. Asian stocks extended…

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Filed under: News - @ February 6, 2026 3:29 am