Japanese Yen Slides to Monthly Low as Fed Holds Rates and BoJ Stays Dovish

Resistance Zone: Near recent monthly high (~157.00)
Support Level: 155.50 region
Bias: Cautiously bullish while Fed remains hawkish and BoJ stays passive
Watch for: Breakout confirmation above the short-term range

Japanese Yen Hits Monthly Low Against USD Despite Geopolitical Jitters

The Japanese Yen (JPY) remains under pressure on Thursday, hitting a monthly low against the US Dollar (USD) as the USD/JPY pair trades near recent highs. While geopolitical uncertainty typically boosts safe-haven currencies like the JPY, broader USD strength and dovish sentiment around the Bank of Japan (BoJ) policy weigh heavily on the Yen.

BoJ Dovish Stance Delays Rate Hike Expectations

Recent reports indicate that the BoJ is in no rush to raise interest rates, with many analysts now forecasting the next hike only in Q1 2026. This follows a decade of ultra-loose policy and weighs on the Yen’s appeal relative to higher-yielding currencies.

Fed’s Hawkish Pause Boosts USD Strength

Meanwhile, the Federal Reserve held interest rates steady during its June meeting but maintained a hawkish tone, projecting rate cuts only in 2025. This helped push the USD to its highest level in over a week, giving the USD/JPY pair further upside momentum.

Related Read: USD Index Rises as Fed Holds Rates, Tensions Mount in Middle East

Geopolitical Tensions May Limit JPY Losses

Even as the Yen struggles, rising tensions in the Middle East are providing some safe-haven support, preventing a deeper slide. Investors remain cautious amid potential US strikes on Iran, and risk-off flows may eventually cap USD/JPY’s gains.