BoJ Set to Maintain Interest Rates at 1% Amid Yen Rebound

Investors are awaiting the Bank of Japan's (BoJ) monetary policy announcement on Friday, following a sudden rebound in the Japanese Yen during Thursday's American session. The yen staged a dramatic recovery after plummeting from above 163.00 to below 158.00 within minutes, sparking speculation that Japanese authorities intervened in the foreign exchange market.

While the BoJ is still widely expected to leave its policy rate unchanged at 1%, the appreciation of the yen has altered the market backdrop heading into the meeting. Investors will focus on the updated economic projections and Governor Kazuo Ueda's press conference to assess whether the central bank's policy outlook could reinforce the yen's recovery.

The BoJ is expected to maintain its policy rate at 1%, supported by a broad majority of the Policy Board, as officials assess incoming data after the June rate hike. The central bank will also publish its quarterly Outlook Report, including updated projections for economic growth and inflation. Policymakers could revise their growth forecasts higher, but headline inflation estimates may be adjusted slightly lower due to government subsidies and softer energy prices.