---
title: "The Japanese yen makes a strong comeback! With fiscal concerns easing and safe-haven inflows surging, the yen is set to achieve its strongest weekly gain since November 2024"
type: "News"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/news/275841996.md"
description: "The Japanese yen has made a strong comeback due to market confidence in Prime Minister Kishi Sanae's victory, expected to record the largest weekly gain since November 2024. The yen has appreciated against the US dollar for four consecutive trading days, strengthening by approximately 2.8% in total. Strong demand for safe-haven assets and increased trust in fiscal policy have supported the yen's exchange rate. Despite the significant appreciation of the yen, investors are concerned about the risk of unwinding \"yen carry trades.\" Kishi reiterated plans to avoid financing through the issuance of large bonds, and market expectations for a Bank of Japan interest rate hike have intensified. The government remains vigilant about foreign exchange fluctuations"
datetime: "2026-02-13T03:01:02.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/275841996.md)
  - [en](https://longbridge.com/en/news/275841996.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/275841996.md)
---

> 支持的语言: [English](https://longbridge.com/en/news/275841996.md) | [繁體中文](https://longbridge.com/zh-HK/news/275841996.md)


# The Japanese yen makes a strong comeback! With fiscal concerns easing and safe-haven inflows surging, the yen is set to achieve its strongest weekly gain since November 2024

According to Zhitong Finance APP, as the market increasingly believes that Japanese Prime Minister Fumio Kishida will win a significant majority in the House of Representatives, it will allow the Japanese government to expand stimulus while maintaining bond investors' trust in fiscal policy. The yen exchange rate (JPY/USD) is on track for its largest weekly gain since November 2024. The yen has appreciated against the dollar for four consecutive trading days, strengthening approximately 2.8% so far this week. Additionally, as the stock market faces massive sell-offs due to AI disruption expectations and intensified sell-offs of risk assets like cryptocurrencies, strong safe-haven demand also supports the yen exchange rate. However, with the yen's significant appreciation, some investors are beginning to worry about the large-scale unwinding risk of "yen carry trades," which could trigger severe fluctuations in the stock, bond, and foreign exchange markets.

Investors interpret Kishida's decisive victory as reducing political uncertainty and lowering the risk of the worst fiscal outcomes, which helps boost the yen exchange rate and drives down Japan's long-term government bond yields from the multi-year highs reached last month. Japanese Prime Minister Fumio Kishida acknowledged market concerns about the "two-year consumption tax exemption on food" at a press conference on Monday and reiterated plans to avoid financing the measure through the issuance of massive bonds.

![1770951024(1).png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260213/1770951040451804.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Taku Yamamoto, a trader at Sumitomo Mitsui Trust Bank in New York, stated, "After the Liberal Democratic Party's overwhelming victory, fiscal concerns have eased, and market expectations for the Bank of Japan to raise interest rates have increased, driving the trend of yen appreciation."

Atsushi Mimura, a senior foreign exchange official in Japan, stated that despite the yen's significant rise this week, the government remains highly vigilant about foreign exchange fluctuations. The market is concerned that the U.S. and Japanese governments may jointly intervene to support the yen, which also helps limit the yen's decline.

"After Prime Minister Fumio Kishida led the Liberal Democratic Party to a historic victory, traders began to price in a policy combination that is relatively rare in Japan—tax cuts without worsening the deficit, potentially supported by internal funding pools. The risk is that this could involve large-scale sell-offs of foreign exchange reserves—meaning short-term buying could benefit the yen, but it would also increase volatility in the foreign exchange market, as there is a lack of a financial script for how far officials are willing to go," said Michael Ball, a macro strategist from Bloomberg Strategists.

Previously, on January 23, following reports about the New York Federal Reserve conducting a "rate check," the yen briefly strengthened significantly, but it weakened noticeably after U.S. Treasury Secretary Scott Bessent stated that the U.S. had "absolutely no" intention of intervening in the foreign exchange market. However, Japanese Finance Minister Shunichi Suzuki recently stated that she is in close contact with Bessent and mentioned that they share significant responsibility for maintaining the stability of the dollar against the yen, which has also raised expectations for U.S.-Japan joint intervention in the yen exchange rate Recently, the significant rise in expectations for interest rate hikes by the Bank of Japan is the core logic behind the appreciation of the yen. Several members of the Bank of Japan's monetary policy committee have recently emphasized that the central bank should "raise interest rates in a timely manner." Overnight index swaps indicate that the probability of the Bank of Japan restarting interest rate hikes in April has increased to 78%. Investors will closely monitor the speech by Naoki Tamura, a member of the Bank of Japan's monetary policy committee, on Friday, as well as the U.S. CPI data, to help assess the outlook for the U.S.-Japan interest rate differential and the yen's exchange rate trend.

**The "Sword of Damocles" Hanging Over Global Stock Markets: Yen Carry Trade**

The yen carry trade can be seen as a "Sword of Damocles" hanging over the stock market, cryptocurrency, and global risk asset markets such as high-yield corporate bonds. This trading strategy is essentially a highly leveraged cross-market financing and risk exposure. When the fundamental driving conditions change (such as a narrowing of government bond yield spreads or yen appreciation), it not only quickly becomes ineffective but also amplifies shocks through a series of market feedback mechanisms, affecting the global stock market, which has been hitting new highs and remains on a bullish trajectory, and potentially impacting the global bond and foreign exchange markets.

The strategist team at BCA Research, a well-known investment firm on Wall Street, recently released a report stating that the yen carry trade is "a ticking time bomb in the global financial market." Against the backdrop of rising expectations for interest rate hikes by the Bank of Japan and fiscal stimulus policies that may drive long-term government bond yields to surge, this hedge fund strategy, which has long been favored by traders, faces the risk of large-scale unwinding, potentially triggering severe reverse shocks.

For a long time, the Bank of Japan has implemented an ultra-low interest rate environment, making the cost of financing in yen extremely low. Investors have thus borrowed yen and invested the funds into higher-yielding risk assets (such as the U.S. stock market, U.S. and European government bonds, emerging market assets, etc.) to earn the "spread." This model of generating returns through low-cost yen financing has been widely adopted during periods of ample global capital and high risk appetite, accumulating a massive scale of leveraged trading positions. Over time, these positions have become potential risk points that could touch the global market, as they rely on the continued existence of yield spreads and the yen maintaining a weak position. However, once risk assets decline or the yen strengthens, or Japanese government bond yields soar, this carry trade will quickly unravel.

The rise in expectations for interest rate hikes by the Bank of Japan, combined with fiscal stimulus and supply pressures, will lead to an increase and volatility in long-term Japanese government bond yields, weakening the basis for the "borrow yen, buy high-yield assets" trade and increasing the likelihood of forced deleveraging when risk sentiment deteriorates. Recently, several members of the Bank of Japan's monetary policy committee have also emphasized that the central bank should "raise interest rates in a timely manner," and market bets on further interest rate hikes by the Bank of Japan are rapidly heating up.

However, fiscal stimulus may also allow the carry trade model to continue to "survive" in the short term through the path of "increased risk appetite/weak yen." Therefore, what truly triggers large-scale unwinding is often a combination of upgraded interest rate hike expectations, weakened risk sentiment, and yen appreciation, rather than focusing too much on a single variable.

The BCA team, led by veteran Wall Street strategist Arthur Budaghyan, believes that this carry trade model is at risk of collapsing rapidly, similar to what happened in 2008, 2015, and 2020 During those periods, the rapid deterioration of global risk sentiment triggered a sudden deleveraging, with investors scrambling to buy the yen, which has safe-haven attributes

### 相关股票

- [Currencyshares JPY Trust (FXY.US)](https://longbridge.com/zh-CN/quote/FXY.US.md)
- [ChinaAMC Nomura N225 ETF(QDII) (513520.CN)](https://longbridge.com/zh-CN/quote/513520.CN.md)
- [Simplex Financial Holdings Co., Ltd. (1568.JP)](https://longbridge.com/zh-CN/quote/1568.JP.md)
- [CSOP NIKKEI225 (03153.HK)](https://longbridge.com/zh-CN/quote/03153.HK.md)
- [Huaan MUFG N225 ETF(QDII) (513880.CN)](https://longbridge.com/zh-CN/quote/513880.CN.md)
- [Pro Ultrshrt Yen (YCS.US)](https://longbridge.com/zh-CN/quote/YCS.US.md)
- [Pro Ultr Yen (YCL.US)](https://longbridge.com/zh-CN/quote/YCL.US.md)
- [BlackRock, Inc. (1475.JP)](https://longbridge.com/zh-CN/quote/1475.JP.md)
- [Asset Management One Co., Ltd. (1473.JP)](https://longbridge.com/zh-CN/quote/1473.JP.md)

## 相关资讯与研究

- [Pricier fuel hits Tokyo cherry blossom river cruises ](https://longbridge.com/zh-CN/news/281140182.md)
- [Japanese Firms Reduce Share Buybacks for First Time Since 2020](https://longbridge.com/zh-CN/news/281588090.md)
- [Berkshire Eyes Yen Bond Sale After 300 Billion Japan Investment](https://longbridge.com/zh-CN/news/281653954.md)
- [BoJ leans toward further hikes but flags oil-driven stagflation risks](https://longbridge.com/zh-CN/news/280928075.md)
- [BOJ keeps rate‑hike door open even as Iran war squeezes firms](https://longbridge.com/zh-CN/news/281610939.md)