FX.co ★ Japanese Yen Rises After BOJ Decision

On Friday, the Japanese yen appreciated beyond 147.5 per dollar, recovering from a two-day slump. This rebound followed the Bank of Japan's decision to maintain its policy rate at 0.5% for the fifth consecutive meeting, in line with market expectations. The central bank highlighted the economy's moderate recovery but also noted certain weaknesses, cautioning against risks associated with global trade policies. Additionally, the bank unanimously agreed to initiate the sell-off of its ETF and J-REIT holdings. In contrast, recent data revealed that Japan's core inflation rate climbed to 2.7% in August, marking a decline for the third consecutive month to the lowest level since November 2024. The yen's previous 1% decline over the past two sessions was influenced by the strengthening of the dollar, following the Federal Reserve's less dovish stance than anticipated. Earlier this week, the Fed implemented a quarter-point rate cut and forecasted two more cuts within the year, while projecting just one cut in 2026.