Japan’s central bank held its policy rate at 1.25% in an 8-1 vote, with one
board member dissenting in favor of a hike. The BOJ said core inflation may
remain near the target and that price risks are skewed to the upside.
Earlier-printed strong Tokyo CPI reinforced market expectations of a December
rate increase, providing additional support to the yen and weighing on USD/JPY.
Further downward pressure on the dollar came from hopes for a diplomatic end to
the US‑Iran conflict and falling US Treasury yields, which narrowed the US‑Japan
yield gap; however, traders are waiting for BOJ Governor UEDA’s post-meeting
press conference before increasing short USD/JPY positions.
