The Japanese yen traded around 163.5 per dollar on Thursday, stabilizing after a rebound in the previous session. The move was largely driven by broad-based dollar weakness following the Federal Reserve’s decision to leave interest rates unchanged. Still, three FOMC members dissented in favor of an immediate hike, and Chair Kevin Warsh stressed that the decision to hold rates should not be interpreted as policy inertia, reiterating that monetary policy will remain data-dependent.
At the same time, the Bank of Japan is widely expected to keep interest rates unchanged on Friday, while signaling that further rate hikes remain on the table to help curb yen depreciation. Verbal interventions by Japanese authorities have so far had limited impact in supporting the currency, and the BOJ has remained noncommittal about the timing of any additional tightening.
On the geopolitical front, the US was reportedly conducting new air strikes on Iran in response to recent attacks on American forces in the region.
