Mitsubishi UFG Says Verbal Intervention, Bank of Japan Hike Speculation Help Dampen Yen Weakness

06:13 AM EDT, 03/23/2026 (MT Newswires) -- The yen (JPY) has held up better than most other G10 currencies against the US dollar (USD) overnight Sunday, with USD/JPY continuing to trade just below the 160.00 level, said MUFG.

The yen has been supported by further verbal intervention from Japanese policymakers, wrote the bank in a note to clients.

Vice Finance Minister for International Affairs Atsushi Mimura warned that the government will take all possible steps to respond to speculative moves in the market as needed. He noted that "some market participants say speculative moves in crude oil futures are affecting the foreign exchange market," and "considering the impact of currency moves on the economy and people's daily lives, the government will take all possible measures at any time." Mimura added that they are ready to act "on all fronts."

The comments will keep market participants wary of the risk of direct intervention to support the yen if USD/JPY breaks above the 160.00 level and moved back closer to the high of 161.95 from July 2024, stated MUFG.

The weak yen and rising energy prices encouraged the Bank of Japan to leave the door open to a rate hike as early as next month's policy meeting, according to MUFG.

There are currently around 16bps of BoJ hikes priced in by the April policy meeting, pointed out the bank. The case for another BoJ hike has been supported as well by further evidence of stronger wage growth in Japan.

Japan's largest labor union, Rengo, revealed that its workers secured an average pay increase of 5.26%, which was only slightly lower than last year's initial reading of 5.46%. The base pay component was slightly higher than last year at 3.85%. It was the third consecutive year that workers had secured wage increases of over 5%.

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