Markets price a 75% chance of a 25 bps Bank of Japan rate increase next month despite cautious signals from the central bank.
The Japanese yen weakened as USD/JPY climbed to 157.75 after testing a two-month low near 155.00. The 160.00 level remains a critical resistance point for traders. Recent price action reflects market caution ahead of potential BoJ policy shifts.
The Bank of Japan’s April Summary of Opinions showed a 6-3 vote split, with some members signaling a lower threshold for raising rates. Swaps markets currently assign a 75% probability of a 25 bps hike to 1.00% at the June meeting. However, the BoJ’s cautious stance has limited yen strength.
Finance Minister Satsuki Katayama declined to confirm whether recent intervention occurred, though analysts estimate ¥5 trillion in potential support. Coordination with U.S. officials was emphasized, but no concrete action was disclosed.