The yen hovers near historic lows against the dollar ahead of the BoJ’s July 31 policy meeting with rates at 1%.
The Japanese yen traded near 164 against the US dollar on Tuesday, just shy of its 40-year low reached last week. Markets are focused on the Bank of Japan’s interest-rate decision on July 31, where rates currently stand at 1%, the highest since September 1995.
Analysts warn of a potential repeat of the 2024 yen carry-trade unwind, which previously pressured crypto markets. The yen’s role as a global funding currency amplifies the impact of BoJ policy shifts, given Japan’s liquidity and minimal capital controls.
USD/JPY’s movement reflects broader concerns over Japan’s monetary policy divergence from other major central banks, particularly as inflation dynamics evolve.