Tokyo CPI and a BoJ decision end a central bank week for the Yen
Most of USD/JPY's October 22-23 drop is back, and the Fed's hold didn't add to it. The pair was above 158.00 in the run-up to the Fed's decision and made its session high, short of 158.50, as Fed Chair Warsh's press conference began.
The US Federal Reserve held interest rates steady at 3.75%-4.00% during their October policy meeting, while Bank of Japan Governor Ueda did not set a specific time for their decision. The USD/JPY currency pair initially dropped near 158.00 during the Fed's press conference but recovered just below 158.00. The October 22-23 drop in USD/JPY was linked to a global selloff in technology stocks as investors repaid borrowed Yen.
The currency regained strength as chip stocks rose on Monday and Tuesday. The upcoming release of Tokyo's Consumer Price Index (CPI) on Thursday and Japan's jobless rate forecast on Wednesday will influence the USD/JPY rate gap. The Bank of Japan's decision has no fixed time, and their quarterly outlook report will be released at 03:00 GMT.
With the timing of the next hike uncertain, traders are focusing on the BoJ side of the gap. The 50-day and 200-day Exponential Moving Averages (EMA) are nearly a fifth of a yen apart, and USD/JPY is currently trading between them. The Japanese Yen, one of the world's most traded currencies, is largely determined by the performance of the Japanese economy, the Bank of Japan's policy, and risk sentiment.
The BoJ's ultra-loose monetary policy from 2013 to 2024 led to a Yen depreciation, but recent policy unwinding has provided some support to the Yen.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
