Will the yen rise? This is a question that traders and investors in the Asia region have asked frequently over the past few years, because the Japanese yen has depreciated by more than 30% over the past 10 years—especially since 2020.

What stands out is that the yen versus the Thai baht continues to draw attention, because it reflects changes in the Bank of Japan’s monetary policy. There are several key letters affecting whether the yen will rise, ranging from interest-rate differentials between Japan and the United States to each country’s economic growth.

After global inflation peaked in 2022-2023, central banks around the world began easing their tight policies, but Japan remained more cautious. Even though inflation is in the range of 2.5% to 3.5%, which is higher than the Bank of Japan’s 2% target, their monetary policy remains accommodative. Their policy interest rate is still negative at -0.1%, and yield curve control continues as well.

Entering 2025, the Bank of Japan reduced its monthly bond purchases from 9 trillion yen to 7.5 trillion yen. In the second quarter, this signal caused the yen to recover slightly, moving from 0.2130 to 0.2176 baht per yen—a technical rebound from a long-term support level—but it still remains near historic lows.

If we’re talking about whether the yen will rise in 2026, it depends on several factors. First is the stance of the Federal Reserve’s policy. If the Fed continues to cut interest rates while Japan gradually tightens its policy, this interest-rate differential could favor the yen strengthening.

Another factor is the repatriation of capital by Japanese institutional investors. Amid uncertainty in emerging markets, the inflow of foreign capital back into Japan often supports the yen. In addition, there are also geopolitical factors that could increase demand for the yen as a regional safe-haven asset.

From a technical perspective, the JPY/THB exchange rate has remained in a continuous downtrend since 2012. After falling below 0.2400 in 2023, the pair tried to rebound but was unable to sustain upward momentum. However, if current support at 0.2150 holds, the yen could gradually strengthen to around 0.2300-0.2400 in 2026.

But if Japan continues to pursue an accommodative policy, while Thailand benefits from strong regional growth and capital inflows, the yen may remain under downward pressure—or even test new lows below 0.2100.

For current technical signals, most indicators point to selling pressure: 7 out of 13 signals are “sell,” while the moving averages are evenly split, with 6 “buy” and 6 “sell.” This suggests there is no clear directional trend in the short term, but downside pressure is clearly present.

In summary, whether the yen will rise is a question with no clear answer. It depends on how precisely the Bank of Japan will move forward with exiting YCC, and in which direction global economic conditions will evolve. 2026 may be a key turning point, but there are still many uncertainties.