Bank of Japan Lifts Rate to 1.0% as USD/JPY Hits 161.8
Updated
Updated · IG International · Jun 22
Bank of Japan Lifts Rate to 1.0% as USD/JPY Hits 161.8
3 articles · Updated · IG International · Jun 22
Summary
A 25-basis-point BoJ hike on June 16 took Japan’s policy rate to 1.0%, but the yen still weakened, with USD/JPY climbing to 161.8 — its highest since July 2024.
The move failed to support the currency because it was already priced in, while hawkish Fed repricing widened the US-Japan two-year yield gap further.
BoJ Deputy Governor Himino cited inflation running above the 2% target and fading downside growth risks, and the central bank said it would halt JGB tapering from April 2027 to steady the bond market.
Japan’s May CPI showed core inflation at 1.4% year on year and core-core at 1.8%, with government fuel subsidies masking underlying price pressure.
With 160 now acting as near-term support and no intervention since early May, sustained momentum above 161.8 could open the way toward 165.