【Japanese Yen Trend】Yen Falls to 4.9 Against Hong Kong Dollar; Japan's Finance Ministry Giant Deploys Export Tactics to Support Yen; Analysts: BOJ Rate Hike Unlikely to Stop Weakening Trend

SocialAnxietyStaker · 2026-03-17T02:32:56+00:00

Recently, the yen has weakened due to ongoing Iran tensions, with 100 yen breaking below 5 against the Hong Kong dollar, trading at 4.91, while the US dollar traded at 159.36 against the yen. Japan's Finance Minister Katayama Koyuki is concerned about exchange rate volatility decoupling from fundamentals and indicated possible action to address it. If oil prices remain elevated and the Bank of Japan does not raise rates, the yen could decline to 165. Markets expect both major central banks will maintain interest rates unchanged this week.

SocialAnxietyStaker

2026-03-17 02:32:56

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The Japanese yen has recently remained weak amid tensions in Iran, with the exchange rate falling below 50 yen per Hong Kong dollar, currently at 4.91. The USD/JPY rate is at 159.36. Japanese Finance Minister Shunichi Katayama stated that recent yen fluctuations do not align with economic fundamentals and reiterated that authorities may take action to address these fluctuations.

Katayama said that overall financial markets remain highly volatile, and the divergence between the exchange rate and fundamentals has persisted for some time. This deviation is particularly noticeable now, and considering the impact on people’s daily lives, authorities are prepared to respond at any time.

Additionally, some research institutions suggest that if energy prices continue to rise and the Bank of Japan does not raise interest rates, the yen will remain weak.

If oil prices do not fall back within three months, the yen could drop to 165

Alpha Binwani Capital founder and seasoned market veteran with 30 years of experience, Alpha Binwani, said: “The yen is currently expected to fall to 160 unless the Bank of Japan raises interest rates, which could prevent this weakness.”

“If oil prices do not fall in the next three months, the yen could drop to 165.”

Binwani pointed out that hedge funds betting against the yen based on oil price trends cannot be supported by verbal interventions. “As long as oil remains above $100 per barrel, energy inflation and import inflation will occur, which undoubtedly means rate hikes. The Bank of Japan has no choice.”

The Federal Reserve and the Bank of Japan are scheduled to hold policy meetings this week. Market expectations are that both central banks will keep interest rates unchanged. Data shows that over one-third of economists still see a possibility of the Bank of Japan raising rates in April. The Fed is expected to cut rates twice this year.

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