The USD/JPY pair is stabilizing after last week's turmoil.

The Japanese yen is correcting against the US dollar on Monday. The current USD/JPY exchange rate stands at 145.50.

Last week was a triumph for the yen, but its victory over the USD was most likely linked to market repositioning. The JPY exchange rate climbed to highs not seen since August 7.

The catalyst for the yen's growth at that time was the comments of the Bank of Japan governor, Kazuo Ueda, who presented a six-month report on currency control, stating that managing the credit and monetary policy would become even more challenging.

This passage triggered a series of speculations that the BoJ was ready to raise the rates soon. However, one should not get carried away with assumptions. The BoJ has adopted a conservative approach to monetary policy in recent years, and it will remain careful in assessing inflation. This implies that its fiscal policy will remain cautious.

The market is reducing the emotion associated with these assumptions, bringing the yen to relatively healthy levels.

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