Bank of Japan's Messaging Mistrial Sends Yen Crashing, USD/JPY & EUR/JPY Surge

The Japanese yen experienced significant depreciation against the US dollar and euro after the Bank of Japan (BoJ) maintained its negative interest rates and made only minor adjustments to its yield curve control program. The USD/JPY rose by 1.5% to reach 151.35, its highest level since October 2020, while the EUR/JPY increased by around 1.2% and broke above the 160.00 threshold, reaching its highest point in 15 years. The BoJ's decision to maintain its benchmark rate and adopt a more flexible approach to controlling long-term rates fell short of expectations, leading to the yen's decline. Additionally, news that the Japanese Ministry of Finance had not intervened in the foreign exchange market recently exacerbated the yen's drop.