- The Japanese Yen gains ground after the remarks from the BoJ Governor Kazuo Ueda on the policy decision.
- The Bank of Japan decided to taper Japanese government bonds (JGB) buying to ¥3 trillion per month.
- The US Dollar faces challenges ahead of the Fed rate decision scheduled for Wednesday.
The Japanese Yen (JPY) extends its decline against the US Dollar (USD) as the Bank of Japan (BoJ) board members decide to raise the short-term rate target by 15 basis points (bps) from the range of 0%-0.1% to 0.15%-0.25%, following the conclusion of its two-day monetary policy review meeting on Wednesday. Additionally, the BoJ decided to taper Japanese government bonds (JGB) buying to ¥3 trillion per month as of the first quarter of 2026.
BoJ Governor Kazuo Ueda explained the reasons behind the surprise policy move at a press conference. Ueda deemed it appropriate to adjust the degree of easing to sustainably and stably achieve the 2% inflation target. Additionally, he emphasized the necessity of tapering Japanese government bond (JGB) purchases in a predictable manner, while ensuring market stability through increased flexibility.
Read more: BoJ Governor speaks on policy outlook after surprise interest-rate hike
The US Dollar (USD) faces challenges ahead of the Federal Reserve’s (Fed) upcoming interest rate decision scheduled for Wednesday. While the central bank is expected to keep rates unchanged in July, there is growing anticipation of a rate cut in September. This speculation is putting pressure on the USD.
Daily Digest Market Movers: Japanese Yen trims gains ahead of BoJ decision
- Japan’s Chief Cabinet Secretary Yoshimasa Hayashi stated on Tuesday that the Bank of Japan and the government will closely coordinate. Hayashi emphasized that the BoJ will work closely with the government to implement appropriate monetary policies aimed at achieving the inflation target.
- Japan’s Retail Sales rose by 3.7% year-on-year in June, surpassing the forecasted 3.3% gain and reaching the highest level in four months. Meanwhile, on a monthly basis, Retail Sales increased by 0.6%, a slowdown compared to the previous 1.7% rise.
- Japan’s Unemployment Rate was 2.5% in June, slightly lower than market forecasts of 2.6% and the rate observed over the previous four months. This marks the lowest jobless rate since January.
- Atsushi Mimura, Japan’s newly appointed Vice Finance Minister for International Affairs and top foreign exchange official stated in a Bloomberg interview on Monday that “while the recent depreciation of the Yen has both advantages and disadvantages, the demerits are becoming more noticeable.” Mimura mentioned that intervention is among the measures available to counter excessive speculation affecting the currency.
- Japan’s top council has urged the government and the Bank of Japan to be mindful of the weak JPY when formulating policy. The council emphasized that the impact of a weak Yen and rising prices on consumption cannot be simply overlooked.
- Bank of America indicates that strong economic growth in the United States allows the Federal Open Market Committee (FOMC) to “afford to wait” before making any changes. The bank states that the economy “remains on robust footing” and continues to expect the Fed to start cutting rates in December.
Technical Analysis: USD/JPY moves below 153.00
USD/JPY trades around 152.80 on Wednesday. The daily chart analysis shows that the pair is testing the lower boundary of a descending channel. Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly below 30, suggesting an oversold currency asset situation and a potential short-term rebound.
Immediate support is located near the lower boundary of the descending channel around the 152.60 level. A drop below this level could reinforce the bearish bias and push the USD/JPY pair lower, possibly revisiting May’s low of 151.86. Additional support may emerge at the psychological level of 151.00.
On the upside, the pair tests the nine-day Exponential Moving Average (EMA) at 154.47, aligned with the “throwback support turned resistance” at the level of 154.50. Further resistance is anticipated near the upper boundary of the descending channel around 155.80.
USD/JPY: Daily Chart
Japanese Yen PRICE Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | 0.03% | -0.40% | -0.09% | 0.52% | -0.29% | -0.07% | |
| EUR | 0.01% | 0.06% | -0.36% | -0.09% | 0.53% | -0.26% | -0.03% | |
| GBP | -0.03% | -0.06% | -0.43% | -0.14% | 0.46% | -0.32% | -0.09% | |
| JPY | 0.40% | 0.36% | 0.43% | 0.36% | 0.91% | 0.09% | 0.37% | |
| CAD | 0.09% | 0.09% | 0.14% | -0.36% | 0.59% | -0.20% | 0.03% | |
| AUD | -0.52% | -0.53% | -0.46% | -0.91% | -0.59% | -0.79% | -0.57% | |
| NZD | 0.29% | 0.26% | 0.32% | -0.09% | 0.20% | 0.79% | 0.23% | |
| CHF | 0.07% | 0.03% | 0.09% | -0.37% | -0.03% | 0.57% | -0.23% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.
The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.