BOJ Holds Steady as Yen Ignores Warnings, Downside Risks Build

The Bank of Japan kept interest rates at 0.75% and still leans toward raising them in the future, but there is less urgency compared to before.

Markets see a small chance of a rate hike in April but are more confident about moves happening around July or later this year.

At the same time, Japanese bond yields are going up due to higher energy prices and fiscal concerns. This adds pressure on the BOJ, even though the yen is not getting stronger.

Officials are talking more about possible intervention, but the yen is not reacting much, showing that markets are not taking the warnings seriously or are testing them.

From a technical view, USD/JPY is still holding key support, but the risk is starting to shift lower. If support breaks, the pair could drop more, especially if intervention or policy action happens. On the upside, the 160 level remains strong resistance, and there is not much strength to push above it right now.

USD/JPY Daily Chart