USD/JPY Rises as BOJ Holds Rates Steady

The Japanese Yen weakened after the Bank of Japan's decision to keep its short-term interest rate at 1.00%. The move, which was expected by markets, came in an 8-1 vote with Board member Hajime Takata dissenting.

Takata argued for another rate hike due to potential upside inflation risks driven by Middle East conflict-related demand pressures.

However, strategists at Scotiabank noted a shift in official rhetoric, pointing out that recent comments from Japan's Ministry of Finance have moved away from explicit FX defence and towards growth-oriented tax cuts.