The Bank of Japan raised rates to 1.00% but the yen weakened as policymakers maintained cautious bond-buying plans.
The Japanese Yen showed limited strength after the Bank of Japan (BoJ) increased its short-term policy rate to 1.00% from 0.75%, the highest level in over 30 years. The move, backed by a 7-1 vote, aimed to address persistent inflation risks but failed to trigger a sharp yen rally as markets focused on the BoJ’s cautious bond strategy.
The central bank announced it would pause its bond-buying taper from April 2027, continuing to purchase roughly ¥2 trillion in Japanese government bonds monthly. This signaled a gradual shift from ultra-loose policy while avoiding market disruption. USD/JPY traded at 160.45, remaining above key moving averages and near resistance at 160.47.
Technical indicators suggested the pair’s bullish bias persisted, with the Relative Strength Index at 58, indicating room for further upside despite recent consolidation.