JPY & PHP - Markets & outlook
Japanese yen - JPY:
February 5, 2026
Key Developments Affecting the Japanese Yen (JPY):
1. Bank of Japan's Interest Rate Hike: On December 19, 2025, the Bank of Japan raised its benchmark short-term interest rate by 0.25 percentage points to 0.75%, marking a 30-year high. This move aims to curb persistent inflation, which stood at 3% in November, above the BOJ's 2% target. (apnews.com)
2. Quantitative Tightening Plan: The BOJ announced a two-year quantitative tightening plan, reducing government bond purchases by about 400 billion yen per quarter. This is expected to decrease the total holdings of Japanese government bonds by approximately 7% to 8% by the fiscal year 2026. (economies.com)
3. Speculation of Government Intervention: In January 2026, the yen surged 1.2% against the U.S. dollar amid speculation about potential currency intervention by Japanese authorities. Prime Minister Sanae Takaichi's proposal for tax cuts ahead of the February 8 elections raised concerns about Japan’s fiscal sustainability, contributing to market volatility. (axios.com)
4. U.S. Treasury Monitoring: The U.S. Treasury added Japan to its 'monitoring list' for foreign-exchange practices, highlighting the global implications of the yen's movements. This underscores the interconnected nature of financial markets and the potential ripple effects of currency interventions. (seo.goover.ai)
Recent Developments in Japanese Yen Policy and Market Reactions:
- What to know about the Bank of Japan's interest rate hike, Published on Thursday, December 18
- Why the Japanese bond drama matters for the global economy, Published on Monday, January 26
Philippine peso - PHP:
February 5, 2026
Key Developments Affecting the Philippine Peso (PHP):
1. Interest Rate Speculations: On January 15, 2026, the Philippine peso reached a new all-time low of P59.46 to the US dollar amid market expectations of a potential 25 basis-point rate cut by the Bangko Sentral ng Pilipinas (BSP). (gmanetwork.com)
2. BSP's Stance on Exchange Rate Levels: On January 25, 2026, BSP Governor Eli Remolona Jr. stated that the BSP does not automatically defend any specific exchange rate level, indicating a possible allowance for the peso to weaken toward the P60 to $1 mark, provided the movement is orderly. (philstar.com)
3. MUFG's Peso Forecast: On February 2, 2026, MUFG Bank Ltd. revised its forecast, projecting the peso to weaken to P60 per dollar due to concerns over economic performance and corruption scandals affecting government spending. (mb.com.ph)
4. Surge in Derivatives Trading: As of February 5, 2026, trading volumes in the Philippine peso interest rate swap market surged 60 times to PHP43.5 billion in January 2026, reflecting a structural shift in monetary policy transmission. (ainvest.com)
These developments highlight the dynamic factors influencing the Philippine peso's exchange rate, including monetary policy decisions, market expectations, and economic performance.
