USD/JPY & BOJ policy signals
Key Questions
What is driving USD/JPY toward the 159-162 range?
The pair has climbed as JGB yields hit 2.60% highs amid BOJ tapering signals. Hot Tokyo CPI data has also supported yen weakness.
What is the BOJ planning regarding bond purchases?
The BOJ will consult markets this week on tapering its bond buying pace as yields surge. This comes as 30-year JGB yields reach record levels.
What are the odds of a June BOJ rate hike?
Markets see 74% probability of a June hike due to hot Tokyo CPI and oil pass-through effects. Inflation concerns are mounting despite recent cooling.
How are inflation trends in Japan evolving?
Core inflation slowed to its lowest level since 2022 in April, missing expectations. However, policymakers remain focused on sustained price pressures.
What risks do rising JGB yields pose to USD/JPY?
Higher yields could support the yen if the BOJ accelerates tightening. This may cap further USD/JPY upside in the near term.
Japan core inf lowest since Mar 2022, challenging 74% June hike odds; BOJ still consulting on bond taper as JGB yields surge (2.60%). USDJPY 159-162.