BoJ Decision in Spotlight as Yen Gives Back Gains
The Japanese Yen has reversed some of its recent gains after the Federal Reserve raised interest rates to 3.75-4.00%. The USD/JPY currency pair, which had risen three sessions in a row, is now trading at around 156.50, roughly halfway back from its September low near 153.00.
The Bank of Japan's decision on Friday is expected to be a quarter-point hike to 1.25%, with the market forecasting that the BoJ will take rates to 1.48% by December and 1.85% by mid-2027.
Japan's inflation figures for August, due out on Thursday at 23:30 GMT, are expected to show a rate of 1.8%, below the Bank of Japan's 2% target.
The BoJ decision will be closely watched, particularly after the Fed's interest rate hike, which had little impact on the gap between the two central banks' rates.