Japanese Yen struggles near two-week low vs USD after BoJ Governor Ueda’s comments

The Japanese Yen experienced a slight dip to a two-week low against the US Dollar after Bank of Japan Governor Kazuo Ueda's comments during the post-meeting press conference. Initially, the USD/JPY pair showed strong intraday gains, reaching a two-week high, but managed to stay above the mid-156.00 mark during the meeting. Following the BoJ's surprise decision to raise interest rates by 25 basis points to 1.25%, the market reaction faded as Governor Ueda reiterated that the central bank would continue to raise rates in response to economic and inflationary pressures.

However, the decision was made on a split vote, with two dissenting members, Toichiro Asada and Ayano Sato, arguing for patience in increasing borrowing costs. These dissenting members were appointed by Prime Minister Sanae Takaichi. The persistent inflation risk remains a concern, as Japan's core inflation measure stayed above 2% throughout 2025, and the BoJ expects it to stay above the target for years to come.

The latest rate hike acknowledged these persistent upside inflation risks but did not meet the expectations of a more aggressive tightening. Japan's ultra-low interest rates have been a significant factor in financing global investments for over a decade, making the Japanese Yen one of the cheapest sources of funding.