Yen traders are anticipating a busy final day to the trading week on Friday with the Bank of Japan due to release its latest interest rate decision during the Asian session. As always there is no set time for the announcement which tends to add to the drama, but it is normally announced around lunchtime in Tokyo. The market is strongly expecting the bank to keep the rate on hold at 1%; however, traders are expecting to see plenty of volatility around the event from any forward guidance that we get from Governor Kazuo Ueda and his team.
The bank is expected to maintain a hawkish skew to its guidance after raising rates in June as inflationary pressure remain high, which should lend some short-term support to the Yen, however the extent of the guidance will be closely monitored in the statement and press conference and anything less hawkish could see the Yen resume its recent decline.
USDJPY is looking primed for a decent move sitting just below multi-decade high, it has now rallied nearly 8% since it hit its 2026 low of 152.08 in January and despite some serious attempts by the Japanese authority to strengthen the Yen, where they have spent close to 12 trillion yen on intervention, the move has been relentless. Last nights rate hold from the Fed did see the pair pull back from 40-year highs, however it is still very much in an uptrend and is now sitting close to trendline support on the Daily chart while recent highs just under 164.00 are still within striking distance and anything less hawkish from the bank could see some sharp moves higher with little in the way of resistance levels anywhere close.
Resistance 2: 163.98 – 2026 High
Resistance 1: 163.88 – Trendline Resistance
Support 1: 163.08 – Trendline Support
Support 2: 160.51 – July Low
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