The yen strengthened and Japanese government bond yields rose to fresh multi-year highs on Friday after the Bank of Japan hiked interest rates as expected and raised its inflation forecasts.

Hence, some follow-through weakness below the 154.00 mark, towards retesting a multi-week low around the 153.70 region touched on Monday, looks like a distinct possibility. On the flip side, attempted recovery might now confront resistance near the 155.

The Bank of Japan raised interest rates on Friday to their highest since the 2008 global financial crisis and revised up its inflation forecasts, underscoring its confidence that rising wages will keep inflation stable around its 2% target.

The Japanese yen is slightly lower on Thursday. In the European session, USD/JPY is trading at 156.25, down 0.16% on the day.

The Bank of Japan hiked interest rates to 0.5%, the highest level since October 2008, and pledged to raise rates further if the economy and inflation continue in line with projections. The bank’s pledge to seek more rate hikes sent Japanese government bond yields higher and boosted the yen.

USD/JPY faces pivotal week as BoJ rate hike, inflation data, and Trump’s policies loom. Key levels at 150 and 160 in focus amid market volatility.

The Bank of Japan raised its key interest rate to about 0.5% from 0.25% Friday, noting that inflation is holding at a desirable target level. “The economy is gradually recovering,” BOJ Gov. Kazuo Ueda told reporters after a two-day policy board meeting in Tokyo.

A weaker yen is typically good for Japanese exporters but could push inflation higher because the country imports much of its energy and food. The Bank of Japankicked off a global market selloff last time it raised interest rates. The likely rate increase this week will be less dramatic, but the real suspense lies in what comes next for the yen.

Japan's Sumitomo Mitsui Financial Group reported a 54 per cent increase in third-quarter net profit on Wednesday, buoyed by a boost in interest income.The net profit rose to 410.8 billion yen ($2.65 billion) in the October-December period,

The Bank of Japan increased ... sending the yen higher against the dollar. The well-flagged 25-basis-point rise to 0.5 percent comes as data indicates the Japanese economy is developing in line ...

BoJ, Fed, and RBA policies dictate USD/JPY and AUD/USD paths. Global trade and China’s economy amplify forex market volatility.

(Bloomberg) -- The yen is primed for further gains after the Bank of Japan sent hawkish signals while raising the benchmark interest rate, according to strategists. The upward revision in ...