Markets eye Bank of Japan meeting on Friday as yen repeats 40-year US dollar lows
Japan’s central bank meets this week as USD/JPY nears 164, close to 40-year yen lows. Markets overwhelmingly expect the Bank of Japan to hold its benchmark rate at 1.0%, after raising it in June to the highest level since 1995. The yen matters globally because it is a major funding currency for carry trades, supported by Japan’s deep liquidity and historically low rates. Since inflation rose in 2022, a weaker yen and possible carry-trade unwind have raised concerns about global liquidity stress. The BoJ has said further hikes may come later and warned that exchange-rate weakness can feed inflation and affect consumer spending. Crypto markets are especially sensitive because yen carry-trade unwinds have previously hit Bitcoin and altcoins sharply.
