USDJPY finds new buyers on Friday and maintains its bid tone following the Bank of Japan’s policy announcement.
The USDJPY pair regains positive traction during the Asian session on Friday, as purchasing activity increases following the announcement of the Bank of Japan’s (BoJ) policy decision. Spot prices have risen again over the 148.00 level in the recent hour, keeping them within striking distance of the YTD high reached on Thursday.
The Bank of Japan maintained its monetary policy settings and provided no future guidance.its weaking the USDJPY.
The Japanese central bank, as expected, opted to leave itsMonetary policy settings were maintained, and no future guidance was provided. This is a significant departure from the Federal Reserve’s (Fed) hawkish perspective, which continues to support the US Dollar (USD) and works as a tailwind for the USDJPY pair. The Fed hinted at at least one more rate rise by the end of the year, and fresh estimates indicate rates much tighter through 2024 than previously predicted.
This, together with an unexpected reduction in US Weekly Jobless Claims, has pushed the yield on the rate-sensitive two-year US government bond to a new 17-year high. Furthermore, the 10-year US Treasury yield has risen to its highest level since November 2007, supporting the Greenback. Having said that, the likelihood of The Japanese government’s intervention in currency markets may deter optimistic traders from putting new wagers on the USDJPY pair.
In fact, the government’s top spokesperson issued a new warning about recent USDJPY weakening on Thursday, saying that Japan will not rule out any alternatives for dealing with extreme volatility in currency markets.
The Fed’s hawkish stance continues to boost the USD and the upward trend
USDJPY Investors may also want to remain on the sidelines and await comments from Bank of Japan Governor Kazuo Ueda for a possible shift in the dovish approach.
