- The Japanese Yen (JPY) is unchanged after losses last week
- BoJ is expected to keep rates unchanged
- The US Dollar (USD) is falling against major peers
- FOMC rate decision is on Wednesday
The US dollar Japanese yen (USD/JPY) exchange rate is unchanged after gains last week. The pair rose 0.47% in the previous week, settling on Friday at 159.38. On Monday at 20:30 UTC, USD/JPY trades +0.0% at 159.38 and traded in a range of 159.10 to 159.60.
The Japanese yen is holding steady ahead of the Bank of Japan interest rate decision due tomorrow.
The BoJ is expected to leave rates unchanged at 0.75%. However, the central bank may strike a hawkish hold, balancing rising energy-driven inflation against economic uncertainty and slowing growth linked to the Middle East conflict.
Intervention fears continue to support the yen after Japanese authorities signalled increased urgency around speculative currency moves.
The meeting follows stronger-than-expected inflation data. March CPI rose 1.5% year-on-year, above forecasts and up from 1.3% in February, while core CPI accelerated to 1.8%, marking its first increase in five months.
However, the GDP outlook is expected to be revised lower, from around 1% to 0.7% for 2026, reflecting the drag from higher energy prices. Even if the BoJ holds rates, it may signal a potential hike as soon as June, with up to 50 basis points of tightening possible by year-end.
The U.S. dollar is unchanged against the yen but falling versus major peers. The U.S. Dollar Index, which measures the currency against a basket of major peers, is falling 0.07% to 98.46, after gains last week.
The US dollar is pushing higher on Monday after gains last week, as investors weigh stalled US–Iran negotiations and prepare for a busy week of central bank decisions.
Efforts to revive talks between Washington and Tehran have intensified after direct negotiations broke down last week.
The dollar has gained over the past two months but is on track to decline in April, as earlier safe-haven flows linked to rising tensions have partially unwound.
Attention is now turning to the Federal Reserve rate decision on Wednesday. The Fed is widely expected to leave rates unchanged at 3.50%–3.75%. Markets are currently pricing in around a 35% probability of a rate cut this year, down from expectations of two to three cuts prior to the escalation in the Iran conflict.
