BOJ Hike Risk Returns, Spiking USD/JPY Volatility

USD/JPY volatility has returned to the spotlight after a sharp yen move in the Asian session raised questions about whether Japanese authorities had stepped back into the market.

The move followed comments from Bank of Japan policymaker Hajime Takata, who argued for a more nimble approach to adjusting interest rates as policymakers respond to inflation. This potentially increases the importance of each BOJ meeting and puts the path for Japanese rates firmly back into focus.