Ahead of a Bank of Japan (BOJ) policy announcement that is almost certain to raise interest rates, the yen was the focus of currency markets on Friday. Meanwhile, the dollar was on track for its worst week in two months.
The markets have fully priced in a 25 basis point raise, and remarks made by BOJ officials recently have also hinted at such a move. The BOJ ends its two-day policy meeting later today.
The yen was barely moving at 156.11 to the dollar before the decision, hovering around a one-week low from the previous session.
Increased anticipation for a rate hike caused the Japanese currency to soar last week, but it has since lost some of its gains as traders wait for further information on the BOJ’s policy outlook.
In the early Asian session, pound increased by 0.08% to 192.80 yen, while the euro increased by 0.07% to 162.66 yen.
Data indicated that Japan’s core consumer prices increased 3.0% in December compared to the same month last year, marking the quickest annual pace in 16 months, which bolstered predictions for a rise in borrowing costs on Friday.
In other news, U.S. President Donald Trump’s widely anticipated tariff pronouncements did not come to pass after his inauguration, contrary to what he had promised throughout his campaign, and the dollar was on track for its worst weekly decline in two months
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