Report published September 24, 2026

USD/JPY: Watch for Volatility over Japan's Autumn Holidays – MUFG Research

MUFG · September 24, 2026

The USD/JPY rose above 157.50 following a unanimous, hawkish 25bp rate hike from the Fed, while the BOJ's 25bp hike was undermined by two dissenting votes and vague forward guidance. With Japanese market participants absent for autumn holidays next week, traders should watch for outsized volatility, intervention risks, and bilateral political meetings.

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Finvaulta summarizes MUFG's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.

Key Takeaways

1.Both the FOMC and the BOJ hiked rates by 25bp, but the FOMC's unanimous hawkish decision contrasted with two BOJ dissenters and lack of guidance, driving USD/JPY up past 157.50.
2.Thin liquidity during Japan's extended autumn holidays could trigger sharp USD/JPY swings and raise the risk of coordinated FX intervention.
3.Upcoming bilateral political events, including PM Takaichi's meeting with President Trump and President Xi's US summit, will be key catalysts for FX policy sentiment.

Week in review
FOMC delivers hawkish surprise
Yen weakens despite BOJ rate hike
Will the US respond?
Forecast range

Report data

FIGURE 1: USD/JPY — as of September 18, 2026.

Metric	Estimate	Context
Federal Funds Target Rate	3.75%-4.00%%	FOMC rate decision announced on 16 September 2026.
BOJ Policy Rate	1.25%	Bank of Japan policy rate increase decided on 18 September 2026.
USD/JPY Forecast Range	155.00 - 159.00 JPY per USD	MUFG's projected trading range for USD/JPY.
USD/JPY Weekly Low	153.41 JPY per USD	Opening level near weekly low for the USD/JPY pair.