BoJ Hawkishness and Reduced Fed Hike Fears Needed to Support Japanese Yen

Rabobank's Senior FX Strategist Jane Foley discusses how the Federal Reserve (Fed) and Bank of Japan (BoJ) decisions could shape USD/JPY. The Fed's stance on forward guidance adds uncertainty, particularly with Chairman Warsh's recent comments.

Foley notes that recent JPY weakness against the US Dollar has been a trend this year. The BoJ's cautious hiking pace is also a concern for the Japanese Yen.

The BoJ meeting on Friday will be closely watched, as its board will have knowledge of the Fed policy meeting outcome. A clearly hawkish BoJ stance and reduced Fed hike fears are necessary to support the JPY and reach their USD/JPY159 target within three months.