Yen weakness persisted as comments from Japan’s officials reinforced the view of supporting growth through lower interest rates outweighs concerns about further Yen depreciation.
Economic Revitalization Minister Minoru Kiuchi acknowledged today that a weaker Yen can push up prices prices. However, he also emphasized that “import prices in Yen terms have been falling for eight consecutive months.” The latest BoJ Corporate Goods Price Index showed that annual import price inflation has been negative throughout 2025, except in January. This underlines Kiuchi’s message that the government remains broadly comfortable with current exchange rate trends.
Taken together with recent comments from other officials, Tokyo’s stance appears tolerant of moderate Yen weakness. As long as the moves are not disorderly, authorities seem focused on broader economic stability rather than exchange-rate management.
The stance reflects clear priorities under new Prime Minister Sanae Takaichi, whose administration has emphasized growth and fiscal stimulus over premature monetary tightening. Her economic package leaves little ambiguity as she called it “extremely important” for monetary policy to focus on achieving strong economic growth
Takaichi also explicitly urged the BoJ to reach 2% inflation sustainably through wage gains, not cost-push effects. Her stance effectively discourages early tightening, highlighting that policy coordination now leans toward growth-first rather than currency defense.
This political backdrop makes it increasingly unlikely that Governor Kazuo Ueda will push for a rate hike at the December meeting. While BoJ board members have indicated readiness to tighten if inflation stays resilient, the growing government influence implies that any move may be delayed until early 2026—and that the pace of normalization will remain slow thereafter.
Technically, CHF/JPY’s rebound suggests that the pullback from 192.67 has completed at 189.07. Decisive break above 192.67 would resume the long term uptrend, targeting 100% projection of 173.06 to 186.02 from 183.95 at 196.91.
On the downside, however, firm break of 189.07 support would risk completing a head-and-shoulders top, signaling the end of the five-wave rally from 165.83.
FTSE pushes toward 10k, GBP/CHF vulnerable, next hinges on UK GDP
Markets are increasingly convinced the BoE will deliver a rate cut next month, after weak labour data showed the UK economy is losing traction. The shift in sentiment has sent the FTSE 100 powering to fresh record highs, with 10,000 level now within reach. Sterling has come under broad pressure, particularly against its European peers. The labor market’s deterioration—rising unemployment, slower pay growth, and growing slack—suggests more weakness than the MPC’s November forecast assumed.
Attention now turns to Thursday’s Q3 GDP report, expected to show a modest 0.2% qoq expansion and stagnation in September. Such subdued momentum could persist into next year, reinforcing calls for the BoE to resume its gradual easing cycle. The Bank is seen returning to a quarterly cut rhythm, delayed only by uncertainty surrounding last week’s Autumn Budget. A weaker-than-expected GDP print would likely fuel talk of a deeper, more sustained rate-cut trajectory into 2026.
In markets, FTSE’s decisive break above its recent channel signals strong bullish acceleration. Near term outlook will stay bullish as long as 9638.98 support holds. Further rise should be seen through 10k psychological level at 100% projection of 8707.65 to 9577.08 from 9276.91 at 10146.34.
GBP/CHF is still bounded in range above 1.0499 support despite yesterday’s dip. Yet, outlook remains bearish with 1.0658 support turned resistance intact. Firm break of 1.0499 will resume the larger down trend to 100% projection of 1.1204 to 1.0658 from 1.0959 at 1.0413.