Yen Weakens Ahead of BOJ Rate Hike Amid Market Expectations
The Japanese yen opened weakly against both the US dollar and euro on Friday's Asian trading session, in anticipation of an expected interest rate hike from the Bank of Japan. The yen slipped 0.1% to 156.19 yen per dollar after snapping a three-day losing streak on Thursday.
Chris Weston, head of research at Pepperstone Group, noted that the market may not be swayed by the rate decision itself, but rather by the forward swaps curve and the bank's guidance on further tightening. He highlighted Governor Ueda's press conference as key to understanding the central bank's stance.
The yen's softness follows Japanese inflation data released on Friday, which showed a slight miss in August expectations. Market participants view a hike from the BOJ as 83% likely, with quarterly rate hikes expected to follow, according to LSEG.