The USDJPY pair is regaining some ground after a wave of declines that pushed the pair back down to close to 145 yen per dollar. According to the minutes of the Bank of Japan’s June meeting, policymakers are currently “divided” on the outlook for interest rates amid concerns about tariffs and rising inflation.
However, this does not change the fact that the hawkish side continues to dominate the BoJ’s structure. Naoki Tamura, the most hawkish member of the Bank of Japan, suggests that if inflation risks increase, it may be necessary to raise interest rates despite economic uncertainty.
Tamura’s statement suggests that the central bank may decide to raise rates earlier than expected, and he himself believes that there is a high probability that the price stability target will be achieved earlier than anticipated. The Bank of Japan is waiting for the effects of US tariffs and trade negotiations between Japan and the United States, but Tamura does not expect these issues to be fully resolved.
The distribution of votes in the BoJ remains skewed to the right, which may indicate faster interest rate hikes. Source: Bloomberg Financial LP
The USDJPY pair resumed its downtrend, rapidly losing bullish momentum after retesting the 200-day EMA (gold curve on the chart). At the moment, the pair has stopped falling in the area of the 50-day EMA (blue curve), and it is the final reaction to this zone that may determine whether the long-term downward trend on USDJPY will continue. Recent comments from BoJ bankers have taken on a slightly more hawkish tone, but it should not be forgotten that a large part of the USDJPY’s decline is due to the problems of the US dollar itself in relation to customs and fiscal uncertainty. Source: xStation
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