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BoJ signals openness to faster hikes as yen weakens

After the report, USDJPY dropped sharply to about 162.65, reflecting market reaction to the yen's inflation risk.

Reported · Written up by our desk · Major Pairs

According to a Bloomberg report relayed by FXStreet, the Bank of Japan is widely expected to keep interest rates steady at the July meeting while indicating it could move to a faster pace if needed.

The report also highlights that recent yen weakness has added upside risk to Japan's inflation, giving the BoJ room to continue tightening toward its roughly 2% price stability target.

Following the news, the yen strengthened quickly, with USDJPY falling sharply to near 162.65.

The backdrop includes the BoJ's shift since March 2024 away from ultra-loose policy, after earlier years of ultra-accommodative measures such as quantitative and qualitative easing and yield control, which contributed to yen depreciation over time.

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