USD/JPY Rebounds Above 160.00 as BoJ Decision Looms

The USD/JPY exchange rate has recovered above the mid-160.00s in early Asian trading on Thursday, ahead of the Bank of Japan's (BoJ) monetary policy decision.

The yen's recent weakness persists despite growing speculation that the BoJ may adjust its policy stance, leaving traders cautious about the outcome.

The pair's recovery reflects a combination of broad US dollar strength and ongoing yen selling pressure, driven by a wide interest rate differential between the US and Japan.

A hawkish surprise from the BoJ could strengthen the yen sharply, pushing USD/JPY lower, while a dovish hold could reinforce the carry trade, driving the pair higher.