Japanese Yen Rebounds on Services PMI Revision, Holds Firm Near 144.00 vs USD

Japanese Yen Rebounds on BoJ Rate Hike Hopes, USD/JPY Dips Below 144.00

Yen Firms as Japan Services PMI Supports Policy Shift

The Japanese Yen (JPY) recovered modestly on Wednesday after touching a weekly low against the US Dollar (USD). The USD/JPY pair dropped below the 144.00 level during early European hours, buoyed by an upward revision in Japan’s Services PMI and rising expectations that higher wages may fuel inflation, nudging the Bank of Japan (BoJ) closer to additional rate hikes.

BoJ Policy Outlook Remains Mixed Despite Hawkish Data

While recent economic indicators suggest tightening may be warranted, BoJ Governor Kazuo Ueda’s comments on Tuesday appeared dovish. Ueda signaled that the next rate hike may not be imminent, and there are ongoing calls to taper BoJ’s balance sheet reduction only after 2026.

Read More: BoJ Monetary Policy Tracker – What’s Next for the Yen?

Geopolitical Tensions and Fed Divergence Add Volatility

Safe-haven demand continues to lend support to the JPY as trade-related concerns and geopolitical risks linger, especially amid rumors of delayed US-China trade progress. Meanwhile, markets eye comments from FOMC officials and upcoming US macro data that may provide clearer direction on Fed policy divergence with the BoJ.

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