Ahead of the Bank of Japan's monetary policy meeting, USD/JPY is moving as markets assess the outlook for additional rate hikes by the Bank of Japan. The focus is on whether Governor Ueda can show a hawkish stance after the meeting, with the possibility of an accelerated yen decline in focus.
USD/JPY fell briefly to the low ¥154s on the previous day's decline in crude oil prices and movements in US long-term interest rates, but US initial jobless claims came in below expectations, while expectations for a rate hike later this year capped the pair's upside.
The Bank of Japan is expected to announce its policy rate after today's monetary policy meeting, with markets viewing a 25-basis-point rate hike as almost certain.
The key to the yen's outlook will be whether Governor Ueda adopts a hawkish stance by signaling an additional rate hike later this year or further rate hikes beyond that.
In addition to the outcome of the Bank of Japan meeting, developments at the Bank of England and US economic indicators are also drawing market attention.