Yen Retreats from 161.00 as BoJ Hints at Further Rate Hikes

The Japanese Yen (JPY) has pulled back to its pre-BoJ levels against the US Dollar (USD), trading just above 160.00 on Friday after briefly touching 161.00 earlier in the day.

The currency's rally following Bank of Japan Governor Kazuho Ueda's hint at further rate hikes did not hold up during the European trading session, with the USD/JPY pair whipsawing within a 240-pip range between 158.60 and 161.00.

Ueda's comments suggested that the BoJ is moving in line with US and European central banks, which will continue to raise their policy interest rate. He also warned of rising medium- to long-term inflation expectations, indicating that the bank may resume monetary tightening in the coming months.

The BoJ left its benchmark interest rate unchanged at 1% but hinted at further action, reassuring markets that it is on track with other major central banks.