In an interview with Bloomberg, Alberto Tamura, a leading executive at Morgan Stanley’s Japan division, has suggested that the yen’s trajectory against the dollar will be determined largely by Bank of Japan policy decisions.
The firm’s Japan leader indicated that without policy intervention, the yen risks sliding to 170 per dollar, while central bank action could lift it to 140. This view comes as investors await the upcoming BOJ meeting, which could have significant implications for currency and bond markets.
The Bank of Japan’s next monetary policy meeting concludes June 16, 2026, and market attention is firmly fixed on whether policymakers will opt to raise interest rates. The Morgan Stanley executive emphasized that a rate hike is seen as the initial requirement for yen strength—a view shared by many in the market who consider the BOJ to be trailing other central banks in tightening policy. The CEO also mentioned that a steadier global economic environment would further support a stronger yen.
Bond and currency markets remain volatile ahead of the BOJ’s decision. Recently, a sharp increase in long-term yields unsettled equity markets. The yield on U.S. 30-year Treasuries approached 5.20%, while the U.K.’s 30-year gilt closed at 5.77%, a level not reached since 1998. The U.S. 10-year benchmark yield also remained elevated near 4.59%.
Contributing to these market moves are persistent inflationary pressures linked to the ongoing Middle East conflict and disruptions to oil trade routes, notably the closure of the Strait of Hormuz. U.S. consumer price inflation for April rose by 3.8% year-over-year, marking the highest level since May 2023, as crude oil traded above $100 per barrel.
Expectations for U.S. interest rate policy have shifted notably, with investors now largely abandoning the outlook for rate cuts this year. Instead, futures markets reflect a considerable probability—ranging from 28% to 55%—that the Federal Reserve could raise rates before year-end.
With the BOJ’s next move approaching, market participants are closely monitoring potential shifts in Japanese monetary policy, which could determine the yen’s near-term direction. An interest rate increase by the BOJ, especially if global conditions stabilize, is viewed as a possible catalyst for yen appreciation.
The BOJ’s decision and rate announcement are scheduled for the morning of June 16.
