Overview
- The finance minister said Japan has a “free hand” to counter excessive yen moves, reinforcing remarks by top currency diplomat Atsushi Mimura about taking appropriate action against one-sided swings.
- USD/JPY retreated from recent highs to trade around the mid‑156s after the comments, paring losses that followed last week’s well-telegraphed BOJ rate hike.
- The Bank of Japan raised its policy rate to 0.75%, a three‑decade high, but Governor Kazuo Ueda’s data‑dependent stance left markets uncertain about the pace of further tightening.
- Japanese government bond yields climbed to multi‑decade highs, with the 10‑year topping roughly 2.1%, reflecting fiscal concerns and heavier expected bond issuance.
- Traders remain watchful for potential intervention if volatility worsens, recalling prior operations near the ¥160 per dollar area, even as analysts expect only gradual BOJ hikes from here.