After the interest rate decision of the Bank of Japan, Zhou Yutian, the chief investment officer of Anbon Multi-Asset Investment, commented that the yen was strong in July. Following the intervention by the Japanese Ministry of Finance earlier may after the lower than expected US CPI in June, the US dollar against the yen fell from the 162 level. The market expectations of the Federal Reserve may cut interest rates earlier in September, also supported the yen in the weakening US dollar exchange rate index. Recently, with the decline of large tech stocks, the closing of crowded US dollar-yen arbitrage trades also gained momentum. Looking ahead, although there may still be some room for closing positions before this week's meetings of the Federal Reserve and the Bank of Japan, it seems unlikely for the yen to continue to appreciate if the US does not enter a recession or the Federal Reserve does not adopt a more dovish stance than expected by the market. After the strong volatility trend stabilizes, the strength of the yen gradually weakens, and it is more likely that the US dollar against the yen will gradually move towards the level above 155. Before the decision of the Bank of Japan yesterday, considering that hedge funds have already closed out more than 80% of their largest short positions since May, the downside for the US dollar against the yen to fall below 152 (above the support level) is limited. Furthermore, if the stock market stabilizes, the safe-haven demand for the yen is expected to decrease. With the Bank of Japan raising the policy interest rate to 25 basis points, it will provide a better entry point for re-entering US dollar-yen arbitrage trades. Based on past performance, regardless of whether the Bank of Japan raises interest rates or not, unless the central bank provides clear guidance on a hawkish future rate hike pace, the US dollar against the yen usually rises.