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2026-09-18 11:16:11
[Yen Falls After Bank of Japan Rate Hike, USD/JPY May Approach 160 Again] (1) The yen fell after the Bank of Japan raised interest rates by 25 basis points as expected. The hawkish rate hike by the Federal Reserve earlier this week had already weakened the yen. (2) Earlier this month, the yen had risen sharply, driven by expectations of faster tightening by the Bank of Japan, the unwinding of yen carry trades, and speculation that the Japanese pension fund might shift more funds to domestic assets. (3) Strategists say the USD/JPY could rise toward 160 if investors believe the Bank of Japan's tightening path is not keeping pace with the Federal Reserve. (4) Given that the 25 basis point rate hike has been largely priced in by the market, this risk is particularly pronounced if Friday's decision or subsequent communications are interpreted as dovish. (5) The latest decline has also brought the risk of intervention back into focus. Officials have emphasized the speed and disorder of exchange rate fluctuations rather than any specific level, but a move toward 160 again could test their tolerance. (6) Traders will be watching Kazuo Ueda's press conference after the decision for clues about the pace and scope of further tightening.
