USD/JPY steadies around 157.4 as the yen outperforms most majors following the Bank of Japan’s decision to keep rates unchanged but signal further hikes.

The Japanese yen kept its edge over most major currencies on Friday, limiting USD/JPY losses to around 157.43 after an intraday dip to 156.96. The move came as the Bank of Japan (BoJ) left its policy rate at 1.25% but hinted at more tightening, while the U.S. dollar recovered from earlier weakness.

BoJ policy decision and inflation outlook

• The BoJ voted 8‑1 to hold the 1.25% rate, with board member Hajime Takata dissenting for a 25‑bp rise to 1.50%.
• It said future hikes will depend on economic and price developments, noting that underlying CPI is now “generally consistent” with its 2% target for the first time since 2013.
• Brown Brothers Harriman highlighted an upgrade to the 2027 inflation forecast and upside‑skewed inflation risks, keeping odds of a 25‑bp hike in December at about 80% and roughly 75 bps of tightening over the next year.

U.S. dollar dynamics

• The greenback rebounded toward the 102.00 level in the DXY after a tech‑stock sell‑off drove investors into safe‑haven Treasuries, pulling yields lower.
• CME FedWatch shows a roughly 72% probability of a Fed rate hike in December, supported by PCE data that kept inflation above the 2% goal and stronger‑than‑expected Q3 GDP growth.
• St. Louis Fed President Alberto Musalem reiterated that the Fed will likely raise rates again soon, preferring gradual adjustments over abrupt moves.

What traders are watching

• Key support for USD/JPY near 156.90 and resistance around 158.00 as the pair edges toward month‑end.
• Upcoming BoJ minutes for clues on the timing of any rate hike and any further revisions to inflation forecasts.
• U.S. data releases, especially PCE and employment numbers, that could shift Fed expectations before the December meeting.

Related news

• Fed officials signal need for more rate hikes
• BoJ holds rate but warns of inflation overshoot risk
• ECB's Nagel says decisive action will be taken if inflation risks persist
• Evening market overview, Oct 30, 2026

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This article is compiled from international market news for information only. It is not investment advice.