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Yen fades near 4-decade lows as BoJ hawkishness is offset by USD
USD/JPY was around 163.1 after rebounding from an intraday low near 162.7, with Middle East tensions and higher oil prices weighing on the yen.
The Japanese yen weakened again on Wednesday, giving back earlier gains despite hawkish signals from the Bank of Japan. FXStreet said USD/JPY was trading around 163.08 after rebounding from an intraday low of 162.71.
FXStreet reported that unnamed BoJ officials indicated the central bank is open to raising interest rates more often than every six months, and they flagged recent yen weakness as a risk that could push inflation higher. The yen has also been pressured by comparatively low Japanese interest rates, broad US dollar strength, and rising oil prices tied to supply disruptions in the Strait of Hormuz.
FXStreet added that traders remain alert for possible yen intervention, noting that Japanese Finance Minister Satsuki Katayama said authorities are prepared to take appropriate action if needed. Separately, the Japanese Ministry of Finance indicated it may encourage public-sector asset managers to increase holdings of Japanese government bonds, although FXStreet said repatriation alone is unlikely to reverse the currency weakness.
On the geopolitical front, FXStreet pointed to fresh US warnings to Iran, with President Donald Trump threatening strikes on Iran’s infrastructure if Tehran targets vessels in the Strait of Hormuz. The report also cited that the US military completed an 11th consecutive night of strikes on Iran, keeping market risk sentiment and energy prices in focus.
Latest closeUSD/JPY 162.90 ▲0.3%