Scotiabank strategists Shaun Osborne and Eric Theoret note the Japanese Yen (JPY) is down sharply versus the US Dollar (USD) after a dovishly delivered 25 bps Bank of Japan (BoJ) hike and Governor Ueda’s cautious guidance. Markets are disappointed by the pushback against consecutive hikes, undermining efforts to rebuild confidence in the Yen. For USD/JPY, they flag key moving averages near 158–159 and the psychologically important 160 level, with support around 155.

Yen slides as markets fade BoJ

“The yen is weak, down 1.2% vs. the USD on the back of a dovishly-delivered hike from the BoJ as market participants digested a 7-2 vote along with a cautious and equivocal message from Gov. Ueda as he discussed the rate outlook.”

“The Gov. pushed back on expectations for consecutive hikes as he also struck a more patient tone in the overall assessment of the outlook. The dovish hike has disappointed markets seeking to rebuild confidence in the yen following a turbulent 2026.”

“For USD/JPY, we note the potential importance of the 50 and 200 day MA’s at 159.09 and 158.42, respectively, and highlight the critical psychological importance of the 160 level. Support is now once again expected at 155.”