FX.co ★ Yen Stabilizes After Sharp Drop

The Japanese yen stabilized around 155.8 per dollar on Tuesday after experiencing pressure overnight due to a magnitude-7.5 earthquake off Japan's northeast coast, which temporarily sparked concerns about potential economic disruptions. Additionally, a downward revision in Japan's third-quarter GDP exerted further pressure on the currency. This revision supports Prime Minister Sanae Takaichi's expansive spending plans, complicating the upcoming policy decisions for the Bank of Japan. The central bank is anticipated to raise interest rates this month as part of a gradual shift towards policy normalization. Investors are now closely watching for comments from Bank of Japan Governor Kazuo Ueda at an event in London today, hoping for insights into the future policy direction. Simultaneously, traders are anticipating a likely 25 basis point rate cut from the US Federal Reserve this week, although expectations for further Fed policy easing in 2026 have diminished.