Bank of Japan (BoJ) Governor Kazuo Ueda is due to hold a press conference at 6:30 GMT, following the central bank’s decision to hold the benchmark interest rate at 0.75% on Friday.
Traders await additional clues from Ueda’s press conference regarding the expected timing of the BoJ’s next rate hike.
Economic Indicator
BoJ Press Conference
The Bank of Japan (BoJ) holds a press conference at the end of each one of its eight scheduled policy meetings. At the press conference the Governor of the BoJ communicates with media representatives and investors regarding monetary policy. The Governor talks about the factors that affect the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy. Hawkish comments tend to boost the Japanese Yen (JPY), while a dovish message tends to weaken it.
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Next release:
Fri Jan 23, 2026 06:30
Frequency:
Irregular
Consensus:
–
Previous:
–
Source:
Bank of Japan
The section below was published on January 23 at 3:35 GMT to cover the Bank of Japan’s monetary policy announcements and the initial market reaction.
The Bank of Japan (BoJ) board members decided to maintain the short-term interest rate at 0.75%, following the conclusion of the two-day monetary policy review meeting on Friday. This decision was widely anticipated.
That leaves borrowing costs at the highest level in three decades.
BoJ’s quarterly Outlook Report
Japan economy likely to continue recovering moderately.
Board’s core consumer price index fiscal 2025 median forecast at plus 2.7 percent compared with plus 2.7 percent in October.
Board’s real GDP fiscal 2025 median forecast at plus 0.9 percent versus plus 0.7 percent in October.
Real interest rates are at significantly low levels.
Risks to economic outlook roughly balanced.
Impact of FX volatility on prices has increased compared to past as firms have become more active in raising prices and wages.
Core consumer inflation likely to slow to below 2% throughout first half of this year.
Actions to reflect wages in selling prices could strengthen more than expected.
Market reaction to the BoJ policy announcements
USD/JPY extends gains toward 158.60 in an immediate reaction to the Bank of Japan’s (BoJ) rates on hold decision, adding 0.11% on the day.
Japanese Yen Price Last 7 Days
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 7 days. Japanese Yen was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.18% | -0.85% | 0.00% | -0.74% | -2.13% | -2.90% | -1.63% | |
| EUR | 1.18% | 0.34% | 1.19% | 0.45% | -0.96% | -1.72% | -0.45% | |
| GBP | 0.85% | -0.34% | 0.86% | 0.11% | -1.29% | -2.07% | -0.79% | |
| JPY | 0.00% | -1.19% | -0.86% | -0.72% | -2.11% | -2.89% | -1.62% | |
| CAD | 0.74% | -0.45% | -0.11% | 0.72% | -1.41% | -2.18% | -0.91% | |
| AUD | 2.13% | 0.96% | 1.29% | 2.11% | 1.41% | -0.78% | 0.50% | |
| NZD | 2.90% | 1.72% | 2.07% | 2.89% | 2.18% | 0.78% | 1.30% | |
| CHF | 1.63% | 0.45% | 0.79% | 1.62% | 0.91% | -0.50% | -1.30% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published on January 22 at 23:00 GMT as a preview of the Bank of Japan Interest Rate Decision.
- The Bank of Japan is widely expected to keep interest rates unchanged at 0.75% on Friday
- The central bank will wait to assess the impact of December’s rate hike before further tightening.
- February’s general elections add a layer of uncertainty to the bank’s monetary policy.
The Bank of Japan (BoJ) is expected to leave its benchmark interest rate unchanged at 0.75% after concluding its two-day monetary policy meeting next Friday.
The Japanese central bank hiked rates to its highest level in three decades in December, and will likely stand pat on Friday to better assess the economic consequences of previous rate hikes.
BoJ Governor Kazuo Ueda is expected to reiterate the bank’s commitment to further monetary policy normalisation. In that sense, investors will analyze Ueda’s press conference with particular attention for further insight into the timing and the scope of the bank’s tightening cycle.
What to expect from the BoJ interest rate decision?
The BoJ is widely expected to keep interest rates unchanged in January and hint at further monetary policy tightening if the economy evolves in line with the bank’s projections.
In December, the bank’s monetary policy committee approved a 25 basis points rate hike to the current 0.75% level, and the minutes of the meeting revealed that some policymakers see the need for further monetary tightening, as real interest rates remain deeply negative, taking inflation into account.
A back-to-back rate hike, however, is completely discarded by the market. More so after Prime Minister Sanae Takaichi’s unexpected call for snap elections earlier this week and her plans to suspend taxes on food and beverages for two years, aiming to help households coping wth the rising inflationary trends.
It is still unclear what impact these actions will have on the central bank’s monetary policy, but the BoJ plans to gradually normalize its monetary policy and remove the monetary stimulus measures without damaging economic growth. Against this backdrop, the bank will opt to wait until the political scenario clarifies and the consequences of previous rate hikes manifest before tightening its monetary policy further.
The Yen, on the other hand, has been depreciating steadily since market speculation about a snap election arose. It will be interesting to see whether JPY weakness has prompted the central bank to adopt a less ambivalent stance towards monetary tightening.
How could the Bank of Japan’s monetary policy decision affect USD/JPY?
Investors are fully pricing a BoJ rate pause on Friday, but the bank will need to make a clear commitment towards a further monetary tightening cycle to stem the current Yen depreciation.
Yen bears have taken a breather over the last few days, favoured by broad-based US Dollar weakness, amid the European Union (EU)-US trade rift after President Donald Trump’s threats to annex Greenland. USD/JPY, however, remains about 0.7% up on the year and relatively close to the 18-month high near 159.50 hit last week.
Investors fear that Prime Minister Takaichi might gain a stronger parliamentary support after the elections to expand her policy of big spending and lower taxes, adding pressure on the country’s strained public finances. This has sent the Yen tumbling and long-term Japanese yields rallying to record highs, amid fears of an upcoming fiscal crisis.
Recent comments by BoJ Governor Ueda have reaffirmed the bank’s gradual monetary-tightening rhetoric, indicating that Japan is moving toward a more durable inflation regime, with a mechanism in place for wages and prices to rise in tandem. The Yen will need clear signs of rate hikes ahead to extend a hitherto fragile recovery.
From a technical perspective, Guillermo Alcalá, analyst at FXStreet, sees the USD/JPY pair on a bearish correction, with key support above the 157.40 area: “The pair has retreated from highs, but Yen bulls would need to break the support area between 157.40 and 157,60, to cancel the near-term bullish structure and aim for the early January lows, around 156.20.”
A hesitant BoJ message would disappoint markets and undermine support for the Yen. In that case, Alcalá sees the pair reaching fresh long.-term highs: “Technical indicators are turning positive. The 4-Hour RGI has bounced up from the 50 line, highlighting a stronger bullish momentum. The pair is testing resistance at 158.70 (January 16 high) at the time of writing, which is the last barrier before the 18-month high near 159.50.”
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.