Bank of Japan Raises Rates, Ends Yield Control; Yen Weakens, USD/JPY Poised to Test 151 Highs

The Bank of Japan (BoJ) raised interest rates for the first time since 2007 and scrapped the Yield Curve Control (YCC) policy, leading to broad Yen weakness.

Hawkish Fed expectations due to hot inflation data have lifted the US Dollar and support further gains in USD/JPY.

BoJ Governor Kazuo Ueda said the bank will continue buying 'broadly same amount' of bonds and consider easing if needed.

Technical analysis suggests USD/JPY is poised to challenge the YTD high at 151.00 on sustained move above 150.

Markets are pricing fewer Fed rate cuts in 2024, reducing bets for policy divergence between the BoJ and Fed.