FX.co ★ Yen Holds Decline on Hawkish Fed Outlook

The Japanese yen hovered around 156.1 per dollar on Thursday after declining for three consecutive sessions, weighed down primarily by dollar strength in the wake of the latest Federal Reserve policy decision. The US central bank raised interest rates for the first time in three years and signaled further tightening this year to rein in inflation.

The Bank of Japan is also expected to increase borrowing costs on Friday, with another rate hike anticipated by the end of January. On the geopolitical front, oil prices eased amid optimism that Saudi Arabia will be able to restore energy flows through its East–West pipeline.

Earlier this month, the yen had risen to a seven-month high, supported by expectations of more aggressive policy tightening by the BOJ, recent joint currency interventions by Tokyo and Washington, and the prospect of greater capital repatriation by Japanese investors.