The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, beginning to recover from a two-week low against the US dollar and on track for its first gain in the last four days, as buying activity from low levels coincided with a decline in the US currency and a halt in the rise of the 10-year Treasury yield.
The Bank of Japan's monetary policy meeting begins later today, with decisions expected tomorrow, Friday, amid expectations of a 25 basis point increase in Japanese interest rates to a range of 1.25%, its highest level in three decades, marking the second increase in borrowing costs this year.
Price overview
Today's Japanese yen exchange rate: The dollar fell against the yen by 0.25% to 155.88 yen, from today's opening price of 156.25 yen, and recorded a high of 156.31 yen.
The yen ended Wednesday's trading down 0.75% against the dollar, its third consecutive daily loss, hitting a two-week low of 156.41 yen, due to the Federal Reserve's hawkish meeting.
US dollar
The dollar index fell 0.1% on Thursday, giving up its highest level in seven weeks at 100.37 points, reflecting a halt in the rise of the US currency against a basket of global currencies.
This decline comes amid profit-taking and corrective activity, as the US awaits further new evidence regarding the path of US interest rates.
The yield on 10-year US Treasury bonds fell 0.6% on Thursday, giving up its highest level in 19 years, putting downward pressure on the US dollar exchange rate.
Bank of Japan
The Bank of Japan’s sixth monetary policy meeting of 2026 kicks off later today, with decisions expected tomorrow, Friday, where interest rates are expected to be raised by about 25 basis points to a range of 1.25%, the highest level since 1995, in the second increase in Japanese interest rates this year.
The bank is expected to reveal more evidence about its continued interest rate hikes in the coming period to counter inflationary pressures stemming from the war in the Middle East.
According to a Reuters report, four sources familiar with the Bank of Japan's direction said the bank is preparing to raise interest rates this week, most likely by 25 basis points, and may hint at accelerating the pace of monetary tightening in the future if price pressures increase the risk of inflation exceeding the target.
Sources said the Bank of Japan likely does not have a preconceived notion of the final interest rate, as it depends on how previous interest rate hikes have affected the economy and the extent to which companies have passed on the burden of higher input costs to households.
