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Bank of Japan meeting eyed after yen swings spur speculation

USD/JPY slid from above 163.00 to below 158.00 within minutes, shifting expectations ahead of the BoJ’s Friday policy decision and outlook report.

Reported · Written up by our desk · Central Banks

Investors are focusing on the Bank of Japan meeting on Friday after the Japanese yen rebounded sharply during Thursday’s U.S. session, with FXStreet noting that speculation has grown about possible Japanese intervention following a rapid move in USD/JPY.

According to FXStreet, USD/JPY tumbled from above 163.00 to below 158.00 within minutes, even as markets generally expect the BoJ to keep its policy rate unchanged at 1%. With the yen’s sudden appreciation changing the near term backdrop, traders are looking to the BoJ’s updated economic projections and Governor Kazuo Ueda’s press conference to gauge whether the outlook supports further yen strength.

The BoJ is expected to maintain the policy rate at 1% after its two day meeting, a decision forecast to be supported by a broad majority of the Policy Board as officials assess incoming data after the June rate hike. The central bank will also publish its quarterly Outlook Report, updating growth and inflation forecasts.

FXStreet said the BoJ could revise growth projections higher, citing resilient domestic activity and strong demand linked to artificial intelligence investment, while inflation estimates may be adjusted slightly lower due to government subsidies and softer energy prices. The outlet added that even a downward inflation revision would not automatically point to a more dovish stance, with the BoJ still expected to warn that underlying price pressures may remain stronger than projected.

Latest closeUSD/JPY 159.74 ▼2.5%

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