FX.co ★ Yen Remains Volatile Ahead of BOJ Meeting

The Japanese yen weakened to around 160.2 per dollar on Friday, giving back part of the previous session’s advance as investors looked ahead to next week’s Bank of Japan policy meeting. Markets widely expect the BOJ to raise interest rates by 25 basis points to 1%, which would be its first hike since December last year and the highest policy rate since 1995, amid persistent inflation and continued currency weakness. Meanwhile, BOJ Governor Kazuo Ueda has been hospitalized with a hepatic cyst infection and is expected to miss the meeting. On Thursday, the yen had strengthened by as much as 0.6% after the dollar fell sharply following comments by President Donald Trump suggesting that a peace deal with Iran could be signed as soon as this weekend in Europe. Japan’s economy remains particularly vulnerable to geopolitical tensions in the Middle East due to its heavy reliance on oil imports from the region.