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Yen firms on renewed intervention speculation after BOJ decision
The Bank of Japan left its policy rate unchanged at 1.00%, while a board member dissented for a 25-basis-point hike and Fed dissenters pressed for additional tightening due to inflation concerns.
The U.S. dollar finished mixed on Friday, but the yen was the dominant currency as speculation intensified that Japanese authorities were preparing to support it. Forexlive reports that news of official rate checks and expectations that intervention may have already taken place kept focus on Japan-specific developments rather than broad U.S. dollar flows.
Further reports said banks were instructed to stand ready to exchange yen for euros, reinforcing the view that policymakers remain uneasy about the yen's recent weakness. The Bank of Japan left its policy rate unchanged at 1.00% as widely expected, though board member Takata dissented in favor of a 25-basis-point rate increase.
Traders also looked beyond the decision itself to what they described as a modestly more optimistic economic outlook, ongoing inflation risks, and the possibility authorities would act again if renewed yen pressure returns. Overall, most other major currencies traded in relatively narrow ranges as intervention expectations kept the yen in focus.
In U.S. central bank news, Forexlive said the three Fed dissenters delivered a consistent message on why they favored a 25-basis-point rate hike at the upcoming FOMC meeting. It added that Neel Kashkari, Beth Hammack, and Lorie Logan argued inflation remains too high to credibly return to the Fed's 2% target without additional tightening.