The BOJ raised its policy rate by 0.25%, but USD/JPY rose into the ¥157 range in the foreign exchange market. The move was driven by the unwinding of speculative yen-long positions, as well as rising crude oil prices and developments at overseas central banks.
The BOJ raised its policy rate by 0.25% at its monetary policy meeting. Yen buying did not lead the market, and USD/JPY rose from the low ¥156s to temporarily reach the ¥157 range. The move has been attributed to the unwinding of yen-long positions built up on expectations of a rate hike ahead of the meeting.
Sasaki Toru (佐々木融) cites rising energy prices against the backdrop of the situation in the Middle East, expanding demand related to AI, higher expected inflation, and continued wage growth as factors supporting the rate hike. These factors could affect the outlook for monetary policy.
The key focus for USD/JPY going forward is whether it can clearly break above the 200-day moving average, which is located in the mid-¥158s. If it breaks through that level, USD/JPY is expected to move back toward ¥160. If gains are capped, however, trading could remain directionless.
Overseas factors that also warrant attention include expectations of additional rate hikes by the Federal Reserve, higher crude oil prices, and developments in the U.S.-Japan interest rate differential. Rising crude oil prices could push up import costs and act as a factor behind yen weakness.