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2025-12-19 09:27:45
The yen hovered near recent lows as markets awaited the Bank of Japan's interest rate decision. 1. The yen traded in a narrow range near recent lows on Friday, with the USD/JPY pair currently at 155.76, not far from the ten-month low of 157.90 reached in November. Traders are closely watching whether the Bank of Japan's meeting will further confirm its path of continued interest rate hikes next year. The euro weakened slightly after the European Central Bank did not signal a rate hike. 2. Following hints from Bank of Japan Governor Kazuo Ueda earlier this month, investors almost unanimously expect the central bank to raise interest rates by 25 basis points to 0.75% later on Friday. Market focus will shift to his tone and outlook for future policy. 3. According to sources, the Bank of Japan will not release its latest estimate of the neutral interest rate this time, nor will it use it as its primary communication tool. Instead, it will rely on Ueda to outline the interest rate path at a press conference (14:30 Beijing time). 4. Yuxuan Tang, Global Market Strategist at JPMorgan Private Bank, stated, "We expect a rate hike; fundamentally, it's long overdue. However, this move is unlikely to trigger a significant rebound in the yen. The message from the authorities may indicate that the next rate hike is still some time away. Nevertheless, if the rate is unexpectedly kept unchanged, the USD/JPY exchange rate could surge, potentially leading to a market confidence crisis and forcing the authorities to intervene directly to stabilize the yen."
