USD/JPY edges lower to near 156.30 ahead of BoJ’s policy decision

Source Fxstreet
  • USD/JPY ticks lower as the US Dollar trades subduedly, with investors looking for cues about the likely full-fledged Trump tariff plan.
  • Investors expect the Fed to leave interest rates unchanged on Wednesday.
  • The BoJ is anticipated to announce its third interest rate hike decision.

The USD/JPY pair ticks lower to near 156.30 in Thursday’s European session. The asset faces slight pressure as the US Dollar (USD) trades subduedly as investors seek clarity over the tariff plan by United States (US) President Donald Trump. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower but holds the key support of 108.00.

Donald Trump has not yet released a full-fledged tariff plan, while investors anticipated that he will unveil the tariff hike structure for all economies right on his first day of administration. In first three days of Trump administration, he has threatened 25% tariffs on Canada and Mexico and 10% on China, which will come into effect on February 1.

Going forward, investors should brace for significant volatility in the US Dollar as the Federal Reserve (Fed) is going to announce its first monetary policy decision of the year on Wednesday. The Fed is certain to announce a pause in the policy-easing spell, according to the CME FedWatch tool. Therefore, investors will pay more attention to the Fed’s interest rate guidance and the likely impact of Trump’s economic policies on the economy and monetary policy.

But before that, investors will focus on the flash US S&P Global Purchasing Managers’ Index (PMI) data for December, which will be released on Friday.

In the Asia-Pacific side, investors await the Bank of Japan’s (BoJ) monetary policy announcement on Friday. The BoJ is expected to raise interest rates. This would be the third interest rate hike by the BoJ of the current policy-tightening cycle. BoJ hawkish bets accelerated after some officials, including Governor Kazuo Ueda, commented that rate hikes would be discussed in the January meeting. “The central bank is currently analyzing data thoroughly and will compile the findings in the quarterly outlook report, and based on that, the bank will discuss whether to raise interest rates at next week's policy meeting,” Ueda said.

Economic Indicator

BoJ Interest Rate Decision

The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.

Read more.

Next release: Fri Jan 24, 2025 03:00

Frequency: Irregular

Consensus: 0.5%

Previous: 0.25%

Source: Bank of Japan

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
The Fed will sit still on October 28 — but 100 of 100 economists now expect a December hikeA Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
Author  Irene Q.
Oct 22, Thu
A Reuters poll run October 16-20 found 94 of 100 economists expecting the Fed to hold at 3.75-4.00% on October 28 — and all 100 expecting a hike in December, against less than half a month earlier. The market is close to the same price, with CME FedWatch at roughly 17% for October and 82.8% for December. With the Fed in blackout since October 17, here are the five dates that decide the rest of the year, what each one is priced for, and the two directions each can take.
placeholder
Gold Price Analysis Today | Forex Gold Analysis | XAU/USD Analysis - October 26, 2026Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 26, 2026. Read on for the details.
Author  Mitrade
Oct 26, Mon
Get the latest gold price analysis, forex gold insights, and XAU/USD analysis for October 26, 2026. Read on for the details.
placeholder
Big Tech's $800 billion AI bill faces its first real test — free cash flow is the judgeAlphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
Author  Irene Q.
Oct 26, Mon
Alphabet and Microsoft report after the close on October 28, Amazon on October 29, with hyperscaler AI capex running near $800 billion a year. Meta's negative free cash flow and 9.40% drop on October 22 was the warning; this week's prints decide whether cloud growth and backlog can pay for the buildout. Here are the consensus numbers, the free-cash-flow table and the two-sided test.
placeholder
Tesla jumps 5% as Barclays puts a $450 target on the SpaceX merger — the chart was already pointing to 431Tesla closed at $391.62 on October 26, up 5.21%, after Barclays upgraded the stock to Overweight and lifted its target to $450 from $370, citing a sharp inflection in Robotaxi miles and a potential SpaceX merger. The move also completed a double bottom at $345.88 and $349.33, with a neckline at $388.56 and a measured target of $431.24. Here is what the upgrade actually says, why the chart and the analyst now point the same way, and what would break the target.
Author  Irene Q.
Yesterday 05: 30
Tesla closed at $391.62 on October 26, up 5.21%, after Barclays upgraded the stock to Overweight and lifted its target to $450 from $370, citing a sharp inflection in Robotaxi miles and a potential SpaceX merger. The move also completed a double bottom at $345.88 and $349.33, with a neckline at $388.56 and a measured target of $431.24. Here is what the upgrade actually says, why the chart and the analyst now point the same way, and what would break the target.
placeholder
Fed October Rate Decision Preview: Rate Hike Pause Has Become Consensus, How Will US Stocks, Dollar, and Gold React?The Federal Reserve will announce its October interest rate decision at 14:00 Eastern Time on October 28, and Fed Chair Warsh will hold a press conference at 14:30. Markets currently wide
Author  TradingKey
22 hours ago
The Federal Reserve will announce its October interest rate decision at 14:00 Eastern Time on October 28, and Fed Chair Warsh will hold a press conference at 14:30. Markets currently wide
goTop
quote