Japan's Yen Falls to 158 as BOJ Maintains Ultra-Loose Policy
The Bank of Japan held its policy rate at 0.50% and maintained yield curve control, sending the yen to its weakest level against the dollar since July 2024.
James Harrington
Central Bank Correspondent
The Japanese yen fell to 158.20 against the US dollar on Friday, its weakest level in 19 months, after the Bank of Japan kept its policy rate unchanged at 0.50% and signaled no urgency to tighten further.
BOJ Governor Kazuo Ueda said the central bank needs to "carefully assess" whether wage growth will be sustained before considering additional rate hikes. Japan's spring wage negotiations (shunto) are still ongoing, with initial results expected in mid-March.
The currency weakness has sparked concerns about intervention from the Ministry of Finance, which spent approximately $55 billion defending the yen in 2024. Finance Minister Katsunobu Kato warned on Friday that authorities are "watching FX moves with a high sense of urgency."
USD/JPY key levels:
- Current: 158.20
- MOF intervention threshold (est.): 160-162
- 2024 high: 161.95
- BOJ rate: 0.50% (unchanged)
Japanese government bond yields were largely stable, with the 10-year JGB at 1.18%. The Nikkei 225 gained 0.8% as the weaker yen boosted export-oriented stocks.
The yen's persistent weakness has become a political liability for Prime Minister Shigeru Ishiba, who faces falling approval ratings partly due to the rising cost of imported food and energy.