FX.co ★ Yen Edges Lower Ahead of BOJ

The Japanese yen weakened, surpassing the 158.5 mark against the dollar on Friday, continuing its downward trend for the week as market participants awaited the Bank of Japan's latest policy announcement. The central bank is anticipated to maintain its policy rate following last month's increase to a three-decade high of 0.75%. Attention will be focused on Governor Kazuo Ueda's comments post-meeting, as investors seek insights regarding the timing of any future rate hikes amid rising apprehensions about the yen's depreciation. Recent data indicated that Japan's core inflation decelerated in December, yet it remained above the BOJ's 2% target. The yen has faced pressure recently due to growing fiscal concerns, as Prime Minister Sanae Takaichi plans to dissolve parliament and call for a snap election to reinforce her leadership and enhance government spending. Additionally, traders remain vigilant for any possible currency interventions as the yen nears the critical 160 threshold.