Japanese Yen Near Monthly Low Against USD Amid Mixed BoJ Rate Hike Signals

Japanese Yen Near Monthly Low Against USD Amid Mixed BoJ Rate Hike Signals

The Japanese Yen (JPY) weakened for the fourth consecutive day against the US Dollar (USD), testing its monthly low during Wednesday’s Asian trading session. Investors adjusted their expectations for the next Bank of Japan (BoJ) rate hike, now penciled in for early 2026 amid ongoing economic uncertainties.

BoJ Rate Hike Expectations Postponed to 2026

The BoJ’s cautious stance on unwinding its long-term monetary stimulus program has tempered hopes for a rate increase in 2025. This delay has contributed significantly to the Yen’s recent underperformance, as market participants await clearer signals from the central bank.

Trade Uncertainties Add Pressure on the Yen

Despite recent talks between US President Donald Trump and Japan’s Prime Minister Shigeru Ishiba at the G7 summit, no significant breakthrough was made on tariffs. The unresolved trade tensions have reinforced concerns about the Japanese economy and kept downward pressure on the Yen.

USD/JPY Faces Resistance Ahead of FOMC Decision

Although the USD showed strong gains recently, cautious investor behavior ahead of the Federal Open Market Committee (FOMC) decision has limited further USD/JPY upside. The market is awaiting the Fed’s policy statement for guidance, dampening immediate momentum in the pair.

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• USD/JPY Forex Analysis and Forecast
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• Impact of US Tariffs on Forex Markets
• FOMC Interest Rate Decision Analysis