Barclays maintains a neutral position on the USD/JPY exchange rate and believes that there are broader spillover effects.

Barclays strategists are holding a neutral position on the USD/JPY exchange rate. Previously, the yen appreciated significantly, causing the exchange rate to fall to its stop-loss level of 156.0. Barclays strategists, including Mitul Kotech, stated in a report that although the fundamental factors driving the weakening of the yen have not changed, "given that the current situation is due to a rather novel policy move by the United States, caution should be exercised in the short term regarding potential rebounds in the USD/JPY exchange rate." The brokerage believes that a stronger yen may create two-way pressure on the short end of the Japanese government bond yield curve: on the one hand, easing pressure from yen depreciation implies a decreased urgency for the Bank of Japan to raise rates; but on the other hand, historically, foreign exchange intervention often occurs before rate increases.