Where Is USDJPY Headed After the BOJ?
USD/JPY turned bearish in July and has crashed exactly 10 cents but the decline stalled last week right ahead of the BOJ meeting.
USD/JPY turned bearish in July and has crashed exactly 10 cents lower pip to pip, however, the decline stalled last week right at the 100 daily SMA, and this week the price has been consolidating above this moving average, with markets in standstill ahead of the BOJ meeting. Yesterday we heard rumours of a possible 25 bps rate hike by them, which sent USD/JPY 200 pips lower.
The USD/JPY pair saw a significant uptick today, rising by over 200 pips. However, it encountered resistance during the US trading session, as it approached the 50-period moving average on the H4 chart but failed to break through. The currency pair’s decline was influenced by rumors that Bank of Japan (BOJ) board members might discuss a potential rate hike to 0.25%. Consequently, the USD/JPY price fell to 153. This movement coincided with the Bank of Japan’s policy meeting today.
USD/JPY Chart Daily – The 100 SMA Held Yesterday
Bank of Japan Policy Meeting – July 31
- BOJ raises policy rate to 0.25% in July monetary policy meeting
- Prior policy rate was 0.10%
- Nakamura, Noguchi dissented to decision on rates
- To taper bond purchases to ¥3 trillion as of Q1 2026
- That means to reduce scheduled monthly bond buying by around ¥400 billion each quarter
- Bond tapering vote was unanimous
- To review bond tapering plan in June next year via midterm review
- Underlying inflation expected to increase gradually
- Japan economy recovering moderately although some weakness has been seen
- If outlook for economic activity and prices are realised, will continue to raise policy rates and adjust degree of monetary accommodation accordingly
It wasn’t much of a surprise as the Bank of Japan’s decision was leaked to the press yesterday, but the official announcement was still delayed. The yen has been volatile following the news, with USD/JPY currently trading around 153.20, up from 152.60 before the announcement.
Meanwhile, 10-year Japanese government bond yields have slightly decreased from 1.06% to 1.035%, although they remain higher compared to yesterday’s levels, which were closer to 1.00%. Addressing the decision, Noguchi expressed dissent, citing skepticism about the current economic conditions. He pointed out that rising prices are negatively affecting consumption, a concern acknowledged by the BOJ.
USD/JPY Live Chart
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