The Japanese yen extended its decline for a fourth consecutive session on Friday, hitting three-week lows against the U.S. dollar as markets digested the Bank of Japan’s cautious policy stance. The currency is poised for its second straight weekly loss after the BOJ’s latest meeting disappointed hawkish expectations, with Governor Kazuo Ueda’s subsequent remarks further dampening speculation about near-term rate hikes.
The yen’s weakness stems from the central bank’s unexpectedly dovish tone, which saw policymakers maintain their ultra-loose monetary settings and offer little concrete guidance on future tightening. Governor Ueda’s comments emphasizing the need for more evidence of sustainable inflation before considering policy changes effectively pushed back market expectations for a June rate hike, with traders now looking to July or later for potential action.
Technical charts show the USD/JPY pair breaking through key resistance levels, with momentum indicators suggesting the downward pressure on the yen may persist in the near term. Market participants are now reassessing their BOJ policy outlooks while awaiting upcoming U.S. economic data that could influence Federal Reserve expectations and further impact the interest rate differential between the two currencies.
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