FX.co ★ Yen Weakens Despite Hawkish BOJ Outlook

The Japanese yen weakened to around 158 per dollar on Tuesday, giving back part of the previous session’s gains as hawkish signals from the Bank of Japan (BOJ) failed to lend lasting support to the currency. The latest Summary of Opinions showed that policymakers broadly agreed interest rates should continue to rise, noting that underlying inflation has reached levels largely consistent with the central bank’s 2% price stability target. Several members also argued for a faster pace of monetary tightening to bring rates closer to neutral, emphasizing that businesses have become more resilient to higher borrowing costs. BOJ Chief Economist Seisaku Kameda said on Monday that the central bank is likely to raise rates in December and continue its tightening cycle into next year. At the same time, Finance Ministry data confirmed that Japanese authorities intervened in the foreign exchange market in late July to support the yen, buying a record ¥15.4 trillion over a three-day period.