The Japanese Yen experienced a sharp decline following the Bank of Japan’s decision to raise interest rates for the first time in over a decade and scrap the Yield Curve Control policy. The lack of clear guidance on future policy steps from the BoJ added to the selling pressure on the JPY. Additionally, remarks from BoJ Governor Kazuo Ueda, coupled with a strong US Dollar, propelled the USD/JPY pair to a two-week high of 150.50 during the early European session.
The BoJ’s move to raise rates and adjust its policy came after Japanese companies agreed to significant wage increases and positive economic data alleviated concerns of a recession. The decision also coincided with expectations of a less aggressive approach by the Federal Reserve, boosting the USD against major currencies. Technical analysis suggests that the USD/JPY pair may continue its upward trend towards the year-to-date peak of 151.00, supported by positive indicators and a strong outlook for the US Dollar.
Looking ahead, traders are cautious ahead of the BoJ policy decision and the FOMC meeting, which could further impact currency movements. The USD’s strength, along with market sentiment and economic indicators, will likely influence the USD/JPY pair’s direction in the coming days. Support near the 150.00 mark and resistance at 151.00 provide key levels to watch for potential trading opportunities in the currency pair.
