JPY: Hawkish BoJ hold shapes rate path – DBS

FXStreet Insights Team FXStreet

DBS Group Research economist Ma Tieying notes that the Bank of Japan (BoJ) kept its overnight call rate at 0.75% in April, with the largest dissent under Governor Ueda signalling internal pressure for further tightening. DBS highlights BoJ forecasts showing stronger inflation than growth and maintains a call for a 25bps hike to 1.00% by July, but warns support for the Japanese Yen (JPY) may be limited.

BoJ signals tightening bias despite caution

"The Bank of Japan kept the overnight call rate unchanged at 0.75% at its April 28 meeting, in a 6-3 vote."

"This marked the largest dissent against a hold decision in the past three years under Governor Ueda, pointing to rising internal pressure for further tightening."

"The BoJ’s updated macroeconomic forecasts reinforce this tilt, suggesting inflation risks outweigh growth risks."

"We maintain our forecast for the BoJ to raise rates by 25bps to 1.00% by July."

"A 25bps rate hike may provide only limited support to the JPY."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold tests $$4,400 as softer US bond yields cap USD gains

Gold scales higher for the second straight day and continues to hit new weekly highs through the first half of the European session on Friday, with bulls now awaiting a sustained move beyond the $4,400 mark before positioning for further gains. Retreating US Treasury bond yields keep the US Dollar (USD) uptrend capped ahead of Fedspeak and mid-tier US data.

Bitcoin extends recovery, Ethereum eyes $2,500, XRP holds $1.30

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) extend their recovery, trading above $76,700, $2,400 and $1.300, respectively, on Friday. These top three cryptocurrencies now face key technical levels that could determine whether their recoveries extend further or pull back.

Pi Network halts the decline amid KYC, mainnet migration upgrades

Pi Network (PI) edges higher on Friday after three consecutive days of losses, totaling a 15% decline. Pi Core Team announced clearing 417,000 duplicate accounts with the release of new Know Your Customer and mainnet migration upgrades. Still, the technical outlook for PI is bearish, with the record low of $0.0704 in focus.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.