Dollar Dismal, Yen Muted in 2025 but Euro and Sterling Shine
Forget the dollar's dramatic flop—it's been a year of ignominious retreat, dragging its heels while the euro and sterling strut like Wall Street's new prom kings. The yen? That sly samurai just shrugged, staying stubbornly flat amid the Bank of Japan's tepid policy pokes, refusing to join the party or the pity parade. It's as if currencies held a talent show, and the greenback tripped on stage while Europe stole the spotlight[4][5].
Diving into the data, the USD/JPY hovered around 156-157 through late 2025, with forecasts pointing to mild USD strength into 2026 (up to ¥158.54 average), confirming the yen's muted vibe despite minor weakenings like 0.86% over a recent month[1][2][3]. Meanwhile, a softening dollar created tailwinds for the euro and sterling, which capitalized on policy divergences—think ECB hawkishness versus Fed fatigue—leaving these pairs gleaming amid 2025's forex shuffle[4][5]. Traders eyeing 2026 should watch BoJ rate hints and fiscal fireworks for yen sparks.
