The yen strengthened rapidly in the foreign exchange market, prompting the BOJ to conduct a rate check. After the afternoon of the 18th, the yen continued to move toward the upper ¥156 range per dollar, even after the BOJ's decision.
In the foreign exchange market, the yen strengthened by more than ¥1 in a short period from around 11:30 p.m. Japan time on the 18th, and reports emerged that the BOJ had conducted a rate check as a preliminary step toward foreign exchange intervention. A rate check is the process by which the government and the BOJ check exchange-rate levels with financial institutions before intervening in the market.
The BOJ was said to have decided on a rate hike on the 18th, after which the yen traded in the ¥157 to ¥158 range per dollar. The yen subsequently strengthened rapidly over approximately one hour, briefly reaching the upper ¥156 range per dollar, according to reports.
Market participants believe that the BOJ's rate check heightened expectations of foreign exchange intervention.