USD/JPY Price Forecast: Yen plummets after BoJ’s policy outcome
The Japanese Yen (JPY) underperforms its major currency peers on Friday after the Bank of Japan’s (BoJ) monetary policy announcement. In the European trade, the USD/JPY pair trades 1.3% higher to near 158.00.
The Japanese Yen (JPY) weakened against major currencies after the Bank of Japan's (BoJ) monetary policy decision on Friday. In the European trade session, the USD/JPY pair rose by 1.3% to around 158.00. The Bank of Japan raised interest rates by 25 basis points (bps) to 1.25%, its highest level in 31 years. Two BoJ board members opposed the hike decision.
Despite the BoJ's hawkish tone, stating they would continue on the path of monetary tightening, the Yen suffered losses due to dissensions from two surprise board members. Other major currencies, such as the US Dollar, remained strong, with expectations of further hikes from the Federal Reserve (Fed). Technical analysis indicated a constructive near-term bias for USD/JPY, as it traded above its 20-period exponential moving average (156.61) and showed moderate bullish momentum.
The BoJ's decision to remain on the tightening path was seen as validating the hawkish framework set earlier.
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