Yen and Yuan Watch: USD/JPY and USD/CNY Daily — 2026-10-28
The Chinese Yuan has climbed to a four-year high against the dollar, with the People's Bank of China (PBOC) maintaining a controlled fixing strategy to manage the appreciation pace. Meanwhile, the Japanese Yen remains under pressure near the 157-158 range, with traders closely monitoring Bank of Japan (BoJ) signals ahead of the October 30 meeting and assessing carry-trade risks.
Yen and Yuan Watch: USD/JPY and USD/CNY Daily — 2026-10-28
Top developments
PBOC Sets Fixing Below Market Estimates
On Wednesday, October 28, the PBOC set the USD/CNY central parity rate at 6.7165, a marginal adjustment from the previous session's fixing of 6.7171. This official midpoint remains significantly weaker than the Reuters estimate of 6.6734, indicating the central bank continues to dampen the yuan's rally. Despite the controlled fixing, the onshore spot rate broke through the 6.67 level on October 26, hitting its strongest level since June 2022. The divergence between the spot market and the official fixing suggests the PBOC is actively managing the pace of appreciation to prevent disorderly market moves.
Yuan Basket Indices Decline Despite Dollar Strength
While the yuan has appreciated against the dollar, the CFETS RMB Index fell to 103.41 in the week ending October 23, marking a decline of 0.29 points. This drop in the basket index highlights that the yuan's strength is primarily driven by dollar weakness rather than broad-based global currency appreciation. The "counter-cyclical factor" remains active, with analysts noting that the PBOC's fixing mechanism is deliberately slowing the appreciation relative to market fundamentals.
Yen Weakness Persists Ahead of BoJ Meeting
The USD/JPY pair traded at approximately 157.89 on October 28, showing minimal movement from the previous session. Japanese media reports indicate strong vigilance from the Finance Minister regarding yen depreciation, with discussions on potential intervention impacts on retail investors holding US assets. The yen's recent appreciation of around 6% since late July has led investors to seek alternative carry-trade funding sources, such as the Chinese Yuan and Canadian Dollar. However, the current stability near 157 suggests the market is waiting for concrete policy signals from the BoJ's upcoming October 30 decision.
Japan's Export Slump Complicates Policy
Japan's exports posted a significant miss in September, growing only 16.7%, which raised concerns about the economic impact of currency volatility. The slowdown in export growth, particularly in the semiconductor sector, adds pressure on policymakers to balance currency stability with export competitiveness. This data reinforces the complexity of the BoJ's position, as tighter monetary policy to support the yen could further dampen export-driven growth.
Local view
Chinese Media: Focus on "Stable" Trajectory
Chinese financial outlets like 21st Century Business Herald emphasize that the yuan's trajectory is determined by macroeconomic fundamentals and will likely exhibit "two-way fluctuation". The narrative focuses on the "counter-cyclical factor" as a tool to prevent excessive volatility, rather than a tool for directional manipulation.
Japanese Media: Retail Investor Anxiety
Japanese blogs and financial commentary, such as those on note.com, are highlighting the impact of yen strength on the "New NISA" (Nippon Individual Savings Account) participants who hold US stocks. There is growing anxiety that a sudden yen appreciation could erode the value of overseas assets for retail investors, prompting discussions on hedging strategies.
Context & numbers
- USD/CNY Fixing (Oct 28): 6.7165 (Previous: 6.7171)
- USD/CNY Spot (Oct 26): 6.6681 (High since June 2022)
- CFETS RMB Index (Week ending Oct 23): 103.41
- USD/JPY (Oct 28): ~157.89
- Japan Exports Growth (Sept): 16.7%
On the radar
- BoJ Monetary Policy Meeting: October 30, 2026. Markets are watching for any shifts in yield curve control or interest rate guidance that could trigger a sharper yen appreciation.
- PBOC Fixing Divergence: Continued monitoring of the gap between the official fixing and the Reuters estimate. A persistent gap of ~0.04-0.05 suggests ongoing intervention to slow appreciation.
- Carry-Trade Unwind Risks: Analysts are flagging the potential for a disorderly unwind of yen carry trades if the BoJ signals a hawkish turn, though recent stability has kept these risks contained so far.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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