Weak Yen, Market Awaits Ueda
The Japanese yen remains under pressure following the Bank of Japan's (BOJ) decision to raise interest rates in line with market expectations. This, coupled with a strengthening US dollar, has kept the USD/JPY pair stable above 156.00, its highest level in more than a week.
The BOJ raised short-term interest rates by 25 basis points to 0.75%, the highest level in three decades. However, in its policy statement, the central bank emphasized that this move was part of a gradual and cautious process, not a signal of a shift to restrictive policy. This tone has led the market to reduce speculation of further rate hikes in 2025, thereby losing support for the yen.
Furthermore, relatively positive stock market sentiment has weakened the yen's appeal as a safe haven asset. Market participants are now awaiting comments from BOJ Governor Kazuo Ueda in his post-meeting press conference for clues on future policy direction in 2026, which could potentially trigger further yen movements.
In the meantime, a strengthening US dollar continues to support USD/JPY. However, the growing likelihood of a Fed rate cut creates a divergence in policy direction from the relatively hawkish BOJ, potentially limiting further yen weakness and supporting the lower-yielding JPY. (asd)
Source: Newsmaker.id
