There is an interesting trend regarding the yen today that I believe many people may not have paid enough attention to. The Japanese yen is not just an ordinary currency. It connects to many aspects, from the dollar, bond yields, to the Japanese stock market, and currently, its changes are significantly impacting the Asian region.

In fact, Japan remains the 4th-5th largest economy in the world, with a GDP in the trillions of dollars. Therefore, what the Bank of Japan does has a global market impact, and it's no small matter.

Looking at the main factors driving the yen trend today, they are roughly as follows: First, the monetary policy of the Bank of Japan. These banks still use Yield Curve Control measures to keep bond yields low, unlike the U.S. Federal Reserve which raises interest rates. This difference causes the yen to weaken.

Second, policies of other central banks affecting the situation. Although the Fed has started easing, if Europe or the U.S. remain hawkish, the dollar will strengthen, causing the yen to weaken.

Third, economic growth. If GDP expands, it indicates a strong economy, and the currency will appreciate. Conversely, if GDP contracts, the currency will depreciate.

Fourth, the current account balance. If a country receives more inflows than outflows, its currency appreciates; if outflows are greater, it depreciates.

Fifth, global risk sentiment. The yen is considered a safe-haven asset. During crises, the yen tends to strengthen.

Let’s look at the situation in 2025. During that period, the yen/baht exchange rate was trading at 0.2176 baht per yen, slightly above the long-term support level. Over the past ten years, the yen/baht has depreciated by more than 30%. The possibility of a yen rebound is quite high.

Why is this the case? Since 2022-2023, when inflation surged, central banks worldwide, including the Fed and Europe, began raising interest rates. However, Japan remained cautious. Although inflation in Japan was around 2.5-3.5%, the Bank of Japan maintained a tight stance. Its policy interest rate stayed at -0.1%, and YCC was still in effect.

What’s interesting is that in Q2 2025, the Bank of Japan reduced bond purchases from 9 trillion yen to 7.5 trillion yen. This event caused the yen to recover from 0.2130 to 0.2176, signaling that Japan is preparing to exit its aggressive easing policy.

Meanwhile, the Thai baht remains stable, supported by a recovery in tourism, strong regional trade, and capital inflows. Therefore, the yen trend today still faces downward pressure.

If the Bank of Japan decisively exits YCC and inflation remains high, the yen could rebound to 0.2250-0.2300 by the end of 2025. But if no decisive action is taken, the yen might test new lows.

For 2026, based on the long-term chart, the JPY/THB pair has been in a downtrend since 2012. After falling below 0.2400 in 2023, it attempted to recover but failed to sustain momentum through 2024-2025, mostly trading between 0.2150-0.2250.

If the support at 0.2150 remains strong and macroeconomic factors align, the yen could gradually strengthen to 0.2300-0.2400 in 2026. But if that support breaks, the yen might test new lows below 0.2100, especially if Japan continues easing while Thailand benefits from regional growth.

Key factors to watch in 2026 include three main points: First, global inflation and interest rate differentials. If the Fed continues to cut rates while Japan tightens, this differential will favor a stronger yen.

Second, Japan’s monetary policy trajectory. If concrete moves occur—such as ending negative rates or revising YCC—it could significantly boost the yen. Timing remains crucial.

Third, capital repatriation and geopolitical tensions. Japanese investors might move funds back home, and regional conflicts could increase demand for the yen as a safe asset.

From technical analysis, most indicators signal a sell, but moving averages are neutral. Out of 13 indicators, 7 suggest sell, 1 suggest buy, and 5 are neutral. For moving averages, 6 suggest buy and 6 suggest sell, indicating no clear short-term trend.

In summary, the yen trend today remains a key focus for traders and investors because it connects to many global markets. 2025 could be a turning point for Japan’s central bank policies, which will determine the yen’s direction in 2026. Anyone trading or investing in this region should closely monitor Japan’s policy signals.