TD Securities says markets have largely priced in a September BOJ rate hike; the yen’s near-term direction will depend on how hawkish next week’s forward guidance is. If guidance omits consideration of October or December hikes, the yen could be sold down to the 157–160 range and weaken versus high-yield EM currencies such as the Indonesian rupiah. If BOJ Governor Ueda signals any pace faster than the current quarterly cadence, FX investors are likely to read it as hawkish. TD Securities adds th

TD Securities says markets have largely priced in a September BOJ rate hike; the yen’s near-term direction will depend on how hawkish next week’s forward guidance is. If guidance omits consideration of October or December hikes, the yen could be sold down to the 157–160 range and weaken versus high-yield EM currencies such as the Indonesian rupiah. If BOJ Governor Ueda signals any pace faster than the current quarterly cadence, FX investors are likely to read it as hawkish. TD Securities adds that if post-September pricing implies policy rates reach around 2% by Q2 2027, the yen’s appeal as a funding currency for global carry trades would progressively diminish.