Yen Weakens Ahead of BoJ Rate Hike Decision Amid High Probability of Quarterly Increases

The Japanese yen is starting the trading session weak against both the dollar and the euro, ahead of an expected rate hike from the Bank of Japan. The yen has fallen to 156.19 yen per dollar, a decline of 0.1%, and it's also weaker against the euro by 0.2% at 179.3000 yen.

The market is pricing in an 83% likelihood of a rate hike from the BoJ, with quarterly increases expected to follow. This has led some analysts to believe that the rate decision itself may have limited impact on the yen's value.

Chris Weston, head of research at Pepperstone Group, noted that attention will fall on the forward swaps curve and the bank's guidance around the pace and urgency of further tightening. He added that Governor Ueda's press conference will be key to understanding the BoJ's stance.