Japanese Yen: BoJ guidance key after Fed move – OCBC
OCBC strategist Christopher Wong writes that USD/JPY climbed after the FOMC as front-end US yields rose and the US Dollar (USD) strengthened. He says markets expect a 25bp BoJ hike to 1.25%, with focus on Governor Ueda’s guidance on further normalisation.
The Japanese Yen (JPY) experienced a price increase after the Federal Open Market Committee (FOMC) announcement, as front-end US yields rose and the US Dollar (USD) strengthened. OCBC strategist Christopher Wong anticipates a 25 basis point (bp) Bank of Japan (BoJ) hike to 1.25%, with emphasis on Governor Ueda's guidance on further normalization.
Wong believes that elevated US yields support the USD/JPY pair, but warns that it may turn lower if the BoJ signals a more aggressive tightening or if US data indicate a softening of the Fed's repricing.
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