BoJ Hike Aligns with Market Expectations as EUR/JPY Surges
The Euro (EUR) gained momentum against the Japanese Yen (JPY) on Friday as the Bank of Japan (BoJ) aligned its interest rate hike with market expectations. The EUR/JPY currency cross advanced to around 180.20 during Asian hours, up from minor losses in the previous day.
The BoJ's decision to raise the short-term interest rate by 25 basis points to 1.25% from 1.00% was seen as a hawkish move that supported the Euro. In its monetary policy statement, the BoJ noted that accommodative financial conditions remain and that underlying inflation is gradually approaching its target.
The central bank projected that underlying inflation will reach levels consistent with the 2% target from the latter half of fiscal 2026 through fiscal 2027. However, board members stressed the necessity of monitoring the impact of the ongoing situation in the Middle East on the economy, prices, and global financial and forex markets.