That's likely to mean more volatility ahead for the yen and other Japanese assets, as investors try to make sense of this new reality. The Bank of Japan (BOJ) is finally increasing borrowing costs, albeit cautiously. Investors appear to fear that historically high borrowing costs could precipitate a fiscal crisis that will only tighten the squeeze on JGBs and the yen. Yen volatility has already been creeping up in the last few years. For the first time in decades, Japan has got inflation, ​wage growth, and rising borrowing costs.

Source: The Edge Markets January 15, 2026 18:58 UTC