Japanese Yen strengthens vs USD on BoJ's hawkish pause; focus shifts Ueda's presser

Source Fxstreet
  • USD/JPY attracts sellers for the second straight day amid a combination of negative factors.
  • Hot Tokyo CPI and the BoJ’s hawkish outlook reaffirm December hike bets, boosting the JPY.
  • Iran diplomacy hopes and falling US bond yields exert pressure on the USD and spot prices.

The USD/JPY pair drifts lower for the third straight day on Friday, sliding further below mid-157.00s during the Asian session following the highly anticipated Bank of Japan (BoJ) decision.

As was expected, the BoJ held its policy rate unchanged at 1.25% in an 8-1 vote, with Takata dissenting in favour of a hike. In the accompanying statement, the central bank noted that the core inflation is likely to stay near levels consistent with price target and risk to prices remain tilted toward upside. This comes on top of a hot Tokyo CPI report released earlier today and reaffirms market expectations for an imminent rate hike in December, providing a modest lift to the Japanese Yen (JPY) and weighing on the USD/JPY pair.

Meanwhile, the US Dollar (USD) selling remains unabated amid hopes for a diplomatic resolution to end the US-Iran war. Moreover, declining US bond yields narrow the US-Japan rate differential, lending additional support to the lower-yielding JPY and contributing to the offered tone surrounding the Greenback. This backs the case for a further depreciating move for the USD/JPY pair, though bears opt to wait for BoJ Governor Kazuo Ueda's comments during the post-meeting press conference before placing fresh bets.

Economic Indicator

BoJ Press Conference

The Bank of Japan (BoJ) holds a press conference at the end of each one of its eight scheduled policy meetings. At the press conference the Governor of the BoJ communicates with media representatives and investors regarding monetary policy. The Governor talks about the factors that affect the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy. Hawkish comments tend to boost the Japanese Yen (JPY), while a dovish message tends to weaken it.

Read more.

Next release: Fri Oct 30, 2026 06:30

Frequency: Irregular

Consensus: -

Previous: -

Source: Bank of Japan

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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