FX.co ★ Yen Pressured Ahead of BOJ Decision

The Japanese yen weakened toward ¥160 per dollar on Thursday, hovering near its lowest level since July 2024, when authorities last intervened to support the currency, as investors awaited the Bank of Japan’s policy decision. The central bank is widely expected to leave its policy rate unchanged but may signal a more hawkish stance amid the combination of a weak yen and elevated oil prices, which is heightening inflation risks.

Oil prices climbed again following fresh attacks on energy infrastructure in the Middle East as the Iran war continues. The yen also remained under pressure from a strong US dollar after the Federal Reserve indicated it would keep interest rates on hold until there is clearer evidence that inflation is easing again.

Meanwhile, Prime Minister Sanae Takaichi is scheduled to meet US President Donald Trump later today to discuss potential economic and military cooperation, navigating a delicate diplomatic balancing act after Trump initially urged Japan to deploy warships to the Strait of Hormuz before later retracting the request.