USD/JPY rallies to near 157.00 as Yen plunges after BoJ’s policy outcome

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The USD/JPY is up 0.85% to near 156.90 during the European trading session on Friday. The pair surges as the Japanese Yen (JPY) underperforms across the board, following the Bank of Japan (BoJ) monetary policy announcement.

USD/JPY soars to near 157.00 as the Yen underperforms across the board.
The BoJ hiked interest rates to a three-decade high at 0.75%.
The US Dollar extends gains on lower Fed dovish expectations for the January meeting.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.10%	0.04%	0.82%	0.07%	0.08%	0.42%	0.18%
EUR	-0.10%		-0.06%	0.72%	-0.03%	-0.03%	0.32%	0.08%
GBP	-0.04%	0.06%		0.78%	0.03%	0.03%	0.38%	0.13%
JPY	-0.82%	-0.72%	-0.78%		-0.72%	-0.73%	-0.40%	-0.63%
CAD	-0.07%	0.03%	-0.03%	0.72%		0.00%	0.33%	0.10%
AUD	-0.08%	0.03%	-0.03%	0.73%	0.00%		0.35%	0.09%
NZD	-0.42%	-0.32%	-0.38%	0.40%	-0.33%	-0.35%		-0.24%
CHF	-0.18%	-0.08%	-0.13%	0.63%	-0.10%	-0.09%	0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

In the policy meeting, the BoJ raised interest rates by 25 basis points (bps) to 0.75%, as expected, the highest level seen in three decades. The BoJ was expected to do so as recent comments from officials, including Governor Kazuo Ueda, signaled that they are confident about inflation remaining sustainably close to the central bank’s 2% target.

The Japanese Yen has come under extreme pressure, even as the BoJ has kept the door open for further interest rate hikes. “Will continue to raise policy rate if economy, prices move in line with forecast, in accordance with improvements in economy, prices,” BoJ Ueda said in the press conference.

It seems that the absence of cues regarding when and how much the BoJ will raise interest rates in 2026 has weighed on the Japanese currency, keeping investors in vague about the monetary policy outlook. Also, uncertainty surrounding Japan's economic outlook has prompted concerns over hopes of further policy tightening by the BoJ in the near term. During European trading hours, Japan's economy minister Kiuchi said, "I respect BoJ's decision, but need to be mindful of the economic outlook."

Meanwhile, the rising US Dollar (USD) has also strengthened the pair. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, posted a fresh weekly high near 98.65.

The US Dollar extends its upside as Federal Reserve (Fed) dovish expectations for the January meeting remain lower, even as the United States (US) inflation has cooled down in November.

Economic Indicator

BoJ Interest Rate Decision

The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.