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BOJ Holds 0.75% Rate, Yen Slides to 159 ¥.

4/28/2026

22 4 Full Breakdown

Summary

BOJ Holds Rates

Bank of Japan kept rate at 0.75% despite three board members—Takata, Tamura and Nakagawa—advocating a 25 bp hike.
The decision lowered USD/JPY from 159.50 to 159.00, lifted FY2026 inflation outlook to 2.8% (from 1.9%) and prompted analysts to say the yen’s rise may hint at a June hike.
Middle-East tension and oil at $140-$150 per barrel affect Japan’s economy as short-term yields rose and long-term yields fell, showing fear of over-tightening.

Summary

Japan Cuts Tax

The government scrapped gasoline taxes and introduced subsidies to cushion households from rising oil prices.
The Bank of Japan cut its fiscal-year-2026 growth forecast to 0.5% from 1% because higher crude costs erode terms of trade.
Core-core inflation fell to 2.4% in March, its lowest level since October 2024.
Japan narrowly avoided a technical recession in Q4 2025, posting a revised 0.3% quarter-on-quarter expansion.

Summary

Bauer warns yen

Analyst Folkmar Bauer warned that a stagnant Bank of Japan could push USD/JPY above 160.
He said market expects a BOJ signal for a rate hike only if Iran conflict eases.
Bauer added that without the signal, the Ministry of Finance’s warning of yen-supporting intervention would lose effectiveness.
He linked yen movement to the Iran conflict’s resolution, suggesting limited BOJ guidance and ongoing tension could leave the yen vulnerable.

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BOJ Holds Rates

Bank of Japan kept rate at 0.75% despite three board members—Takata, Tamura and Nakagawa—advocating a 25 bp hike.
The decision lowered USD/JPY from 159.50 to 159.00, lifted FY2026 inflation outlook to 2.8% (from 1.9%) and prompted analysts to say the yen’s rise may hint at a June hike.
Middle-East tension and oil at $140-$150 per barrel affect Japan’s economy as short-term yields rose and long-term yields fell, showing fear of over-tightening.

1 / 3