Japanese yen could be one of the best performers for the end of the year

The Japanese yen is stepping into the FX spotlight, battling the Australian dollar for top weekly performer — with the AUD lifted by the RBA’s hawkish pause and firm domestic data.

A rare sight in 2025, the yen is beginning to dominate broader currency performance, as fundamentals start to assemble in its favor.

Political momentum is shifting, with LDP contenders Takaichi and Koizumi pulling ahead in Friday’s LDP party leadership race and hinting at a possible renegotiation of Japan’s trade deal with the US.

Both stances, seen as less supportive of Abenomics and Ishibanomics’ era of ultra-low rates, fuel growing speculation that BoJ hikes may be closer than expected.

Economic data has been mixed for Japan — stronger GDP, firm retail sales and low unemployment point, even as some sectors still show weakness — inflation momentum building also gives some reasons for the BoJ to move.

Recent remarks from Noguchi and other officials underline that policy has entered a phase demanding “careful assessment,” as hawks and doves grow more divided.

With US rate differentials projected to narrow on the back of FOMC cuts, and the BoJ inching toward normalization, the yen’s case for strength into year-end looks interesting.

Let’s explore USDJPY multi-timeframe charts (and a few other yen crosses) to see where the it stands.