Japanese Yen: Dovish BoJ hike weighs on yen – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret note the Japanese Yen (JPY) is down sharply versus the US Dollar (USD) after a dovishly delivered 25 bps Bank of Japan (BoJ) hike and Governor Ueda’s cautious guidance.
Scotiabank strategists Shaun Osborne and Eric Theoret report the Japanese Yen (JPY) experiencing a significant decline against the US Dollar (USD) following a dovishly delivered 25 basis point Bank of Japan (BoJ) rate increase and Governor Ueda's measured outlook. Markets are disheartened by the resistance to successive hikes, dampening efforts to restore trust in the Yen.
For USD/JPY, they point to crucial moving averages near 158-159 and the psychologically significant 160 level, with support around 155. The yen's weakness is attributed to a dovish BoJ hike, as market participants grapple with a 7-2 vote and a cautious message from Governor Ueda regarding the rate outlook. Governor Ueda's stance, pushing back on expectations for consecutive hikes and adopting a more patient tone, has further disappointed markets hoping to regain confidence in the yen after a turbulent 2026.
The Bank of Japan (BoJ) has raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, signifying another phase in the normalization of monetary policy and aligning with the anticipation shared by many for weeks.
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