BoJ's Dovish Hike Weighs on Japanese Yen Against US Dollar
The Japanese Yen (JPY) has taken a sharp hit against the US Dollar (USD) following a dovishly delivered 25 bps Bank of Japan (BoJ) hike. Scotiabank strategists Shaun Osborne and Eric Theoret note that markets were disappointed by the pushback against consecutive hikes, which undermines efforts to rebuild confidence in the Yen.
According to Scotiabank, the yen is down 1.2% versus the USD on the back of a dovishly-delivered hike from the BoJ. This move was met with a cautious message from Governor Ueda, who pushed back on expectations for consecutive hikes and struck a more patient tone in the overall assessment of the outlook.
The dovish hike has left markets seeking to rebuild confidence in the yen following a turbulent 2026. For USD/JPY, Scotiabank flags key moving averages near 158-159 and the psychologically important 160 level, with support around 155.