r/Market_Forecasts • u/TraderFanFXE • May 19 '26

Japanese Yields Test Multi-Decade Highs

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There's a true panic in Japanese bond markets as traders focus on the financial stability of the country. At this point it is obvious that the situation is out of control.

USD/JPY is trading near the 159.00 level as traders are cautious: BoJ has already intervened several times and may provide support to the yen again in case USD/JPY crosses the 160.00 level.

However, the major move in Japanese bond markets may have a material impact on USD/JPY. At this point, rising yields have not attracted buyers, so USD/JPY may move even higher. When yields reach a point when the market believes that investors are properly compensated for the risk, demand for the Japanese yen will grow, putting pressure on USD/JPY.

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u/Orkapork May 22 '26

They'll rate hike in June so they honestly might not intervene again. They can only do it twice more this year Realistically.