FX.co ★ Yen Strengthens on Hawkish BOJ Minutes

The Japanese yen strengthened beyond 158 per dollar on Thursday, extending gains for a second consecutive session after minutes from the Bank of Japan’s September meeting reinforced expectations of further monetary tightening. One board member suggested there could be scope to accelerate interest rate hikes as the central bank evaluates the impact of Middle East developments, rising demand related to artificial intelligence, and foreign exchange movements.

The BOJ raised its policy rate to a 31-year high of 1.25% in September and then left it unchanged in October, while signaling that underlying inflation had reached its 2% target—potentially paving the way for another rate increase in December. The yen also found support from a weaker US dollar following Democratic gains in the US midterm elections. The clearer political outcome eased uncertainty and reduced expectations that President Donald Trump would resume military strikes against Iran.