Gold remains depressed below the $4,600 mark heading into the European session, though bears seem hesitant and opt to wait for the crucial FOMC policy decision, due to be announced later this Wednesday. The key focus will be on the post-meeting press conference, where comments from the outgoing US Federal Reserve Chair Jerome Powell will be scrutinized for cues about the future policy path.
Oil: UAE exit reshapes supply outlook – Commerzbank
Commerzbank’s Dr. Henry Hao and Charlie Lay note Brent and WTI extended gains as the United Arab Emirates announced it will leave OPEC (Organization of Petroleum Exporting Countries) on 1 May, after years of tension with Saudi Arabia over output policy. They highlight that the ongoing war and blockade of the Strait of Hormuz are already constraining Persian Gulf exports, so immediate market impacts from the UAE’s exit may stay limited.
UAE departure supports higher prices
“Meanwhile, energy markets faced a historic shakeup as the United Arab Emirates (UAE) announced it will leave OPEC next month. The exit on 1 May culminates years of tension with Saudi Arabia over oil output policy and regional influence.”
“Energy Minister Suhail Al Mazrouei indicated that the disruption caused by the current war created an opportune time for the departure. He said “This is a decision that we took after a very careful and long review of all our strategies”.”
“Despite the UAE’s announcement, immediate market impacts from the exit will likely be limited since the ongoing conflict continues to throttle exports from the Persian Gulf.”
“Brent crude oil prices rose 2.8% to above USD111. It gained for a seventh consecutive session on lingering concerns grow over the protracted peace process.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Australian Dollar drifts lower after CPI report; focus shifts to Fed decision
The AUD/USD pair continues with its struggle to conquer the 0.7200 mark and drifts lower following the release of Australian consumer inflation figures during the Asian session on Wednesday. Spot prices slide to the 0.7170 area in the last hour, though the downside potential seems limited ahead of the crucial FOMC policy decision later today.
The Australian Bureau of Statistics (ABS) reported that the headline Consumer Price Index (CPI) rose by 1.4% in Q1, lifting the annual rate to 4.1%. Additional details revealed that the Trimmed Mean CPI rose climbed 0.3% during the January-March period and 3.5% over the year. In the absence of a major surprise from the inflation data, the Australian Dollar (AUD) attracts some sellers amid the cautious market mood due to persistent geopolitical uncertainties.
Meanwhile, the latest data does little to dampen hawkish Reserve Bank of Australia (RBA) expectations. In fact, traders are pricing in a greater chance of a 25-basis-point (bps) rate hike at the upcoming RBA meeting in May. This, along with subdued US Dollar (USD) price action, offers some support to the AUD/USD pair and helps limit the downside. Traders also seem reluctant and opt to wait for the highly anticipated FOMC policy decision, due later today.
Investors will look for cues about the US Federal Reserve’s (Fed) future policy path amid worries that the war-driven surge in energy prices will revive inflationary pressures. In the meantime, the lack of progress in US-Iran peace talks and a standoff over the Strait of Hormuz might continue to underpin the USD’s reserve currency status. This should cap the AUD/USD pair and warrants some caution before positioning for an extension of a one-month-old uptrend.
Economic Indicator
Quarterly Consumer Price Index (YoY)
The Consumer Price Index (CPI), released by the Australian Bureau of Statistics on a quarterly basis, measures the changes in the price of a fixed basket of goods and services acquired by household consumers. The quarterly CPI data series are calculated as the average of the three relevant monthly CPIs. The YoY reading compares prices in the reference quarter to the same quarter a year earlier. A high reading is seen as bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Ireland Consumer Confidence dipped from previous 56.7 to 53.3 in April
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EUR/USD rebounds as Fed decision nears and US-Iran tensions cap Dollar downside
The Euro (EUR) trims a part of its intraday losses against the US Dollar (USD) on Tuesday as the Greenback loses momentum, with traders repositioning ahead of the Federal Reserve’s interest rate decision due on Wednesday while continuing to monitor developments in the Middle East. At the time of writing, EUR/USD is trading around 1.1707, rebounding from an intraday low of 1.1677.
Meanwhile, the US Dollar Index (DXY), which tracks the Greenback’s value against a basket of six major currencies, is trading around 98.66, easing from 98.88 up nearly 0.18% on the day. However, the downside remains limited amid persistent uncertainty surrounding US-Iran tensions and firm US Treasury yields, which continue to underpin the Dollar.
The Fed is widely expected to keep interest rates unchanged in the 3.50%-3.75% range, with the outcome largely priced in by markets. Instead, the focus will be on forward guidance, as policymakers navigate risks to both sides of their dual mandate. The recent surge in Oil prices is feeding into inflation expectations, a trend increasingly reflected in recent economic data. This has prompted traders to shift toward a higher-for-longer rate outlook, compared with earlier expectations of two rate cuts before the US-Iran war escalated.
At the same time, traders are pricing in at least two rate hikes by the European Central Bank (ECB) amid mounting inflation risks from higher Oil prices, although the central bank is expected to hold rates steady at 2.00% at Thursday’s meeting as policymakers balance persistent inflation pressures against risks to economic growth, particularly given the Eurozone’s reliance on imported energy.
ECB Bank Lending Survey for the first quarter of 2026, released on Tuesday, showed inflation expectations rising across horizons. Inflation expectations one year ahead rose sharply to 4.0% in March from 2.5% in February, while expectations three years ahead increased to 3.0% from 2.5%, and five-year expectations edged up to 2.4% from 2.3%.
On the geopolitical front, efforts to end the US-Iran war appear to have stalled, with the Strait of Hormuz still largely disrupted, keeping Oil supply tight. Iran is expected to submit a revised peace proposal in the coming days, according to CNN, citing sources, after US President Donald Trump and his national security team expressed skepticism over Tehran’s earlier offer, which deferred nuclear negotiations to a later stage.
Economic Indicator
Fed Interest Rate Decision
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Next release: Wed Apr 29, 2026 18:00
Frequency: Irregular
Consensus: 3.75%
Previous: 3.75%
Source: Federal Reserve
Ripple Price Forecast: XRP risks bearish shift as price drops below $1.40
Ripple (XRP) is edging lower below $1.40 at the time of writing on Tuesday, as the broader crypto market faces renewed volatility. The remittance token is under intense sell-side pressure and struggling to hold key support levels amid growing risk-off sentiment.
The conflict in the Middle East continues to drive investors on edge, while the crypto Fear & Greed Index declines to 33 on Tuesday, from 47 the previous day. Despite the United States (US)-Iran ceasefire holding, the Strait of Hormuz is still shut.
Reports say that US President Donald Trump is unlikely to accept Iran’s proposal to open the Strait, which skips Tehran’s nuclear program. Dismantling Iran’s nuclear program remains to be Trump’s hardline point to ending the war.
Risk-off sentiment persists amid muted ETF activity
Institutional interest in XRP digital investment products shows signs of deterioration, as ETFs remained quiet on Monday, with no flows recorded, according to SoSoValue data. Cumulative inflows held at $1.29 billion, while net assets under management averaged $1.06 billion. If sentiment softens further amid deteriorating risk appetite, recovery for XRP could be an uphill battle.
Despite retail demand holding steady with the futures Open Interest (OI) at $2.57 billion, it pales in comparison to the record $10.94 billion reached in July. Low retail demand signals that investors lack conviction in XRP’s ability to sustain the uptrend. Hence, there is an unwillingness to open new positions.
Technical outlook: XRP at risk of extending losses
XRP trades at $1.38, maintaining a bearish near-term bias. The price holds below the 20-day Simple Moving Average (SMA) of the Bollinger Bands around $1.40 and the 50-day Exponential Moving Average near $1.41, confirming a broader bearish outlook.
The Relative Strength Index (RSI) sits just below the 50 midline, around 47 on the daily chart, while the Moving Average Convergence Divergence (MACD) histogram has slipped marginally back below zero, with the signal line turning down. Both indicators suggest waning upside momentum as rallies meet overhead supply.
On the topside, initial resistance is aligned at the Bollinger Bands’ middle boundary at $1.40, followed by the 50-day EMA around $1.41. A stronger recovery would face further caps at the upper Bollinger Band near $1.48, then at the 100-day EMA at $1.53, and the 200-day EMA near $1.75, reasserting the broader bearish structure. On the downside, the lower Bollinger Band at roughly $1.32 serves as the next notable support, with a sustained break below it likely opening the door to deeper losses within the prevailing daily downtrend.
(The technical analysis of this story was written with the help of an AI tool.)
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
Austria UniCredit Bank Manufacturing PMI fell from previous 52.4 to 51.2 in April
Gold trades with a negative bias below the $4,700 mark for the second consecutive day, and slides back closer to last week’s swing low during the Asian session. The uncertainty over the second round of US-Iran peace talks assists the US Dollar in attracting some buyers, which is seen weighing on the commodity. However, expectations for a less hawkish US Federal Reserve could limit losses for the non-yielding bullion ahead of the key central bank event risk.
Bank of Japan holds interest rate at 0.75%, upgrades inflation forecasts
The Bank of Japan (BoJ) board members decided to leave the short-term interest rate unadjusted at 0.75%, following the conclusion of its two-day monetary policy review meeting on Tuesday.
The decision aligned with the market expectations.
Summary of the BoJ’s Monetary Policy Statement
BoJ makes policy decision by 6-3 vote.
BoJ board members Nakagawa, Takata and Tamura dissented to rate decision.
Nakagawa, Takata and Tamura proposed raising short-term interest rate target to 1.0% from 0.75%.
Proposal by Nakagawa, Takata and Tamura turned down by majority vote.
BoJ’s Nakagawa said while situation in Middle East remained unclear, given economic developments, risks to prices were skewed to the upside under accommodative financial conditions.
BoJ’s Takata said price stability target had been more or less achieved and that risks to prices in Japan were already skewed to the upside due to the second-round effects of price rises stemming from overseas developments.
Will continue to raise interest rates in accordance with developments in economy, prices, financial markets.
Will scrutinise timing, pace of policy adjustment with close eye on economic, price impact from Middle East development.
Will conduct monetary policy as appropriate from perspective of sustainably, stably achieving 2% inflation target.
Japan’s economic growth likely to decelerate in fiscal 2026.
Corporate profits, households’ real income to be pushed down by factors such as deterioration in terms of trade reflecting rise in crude oil prices.
Economy to be underpinned by government’s various measures such as fuel oil subsidies, other factors.
BoJ’s quarterly Outlook Report
Real interest rates are at significantly low levels.
Underlying inflation likely to be at level generally consistent with 2% target in second half of fiscal 2026 and fiscal 2027.
Risks to economic outlook skewed to downside.
Risks to inflation skewed to upside.
Japan’s economic growth is likely to decelerate in fiscal 2026.
The rise in crude oil prices reflecting the impact of the situation in the Middle East is expected to push down corporate profits and households’ real income.
Economy is expected to continue growing moderately, albeit at a decelerated rate.
Japan’s economic growth rate is likely to rise moderately from fiscal 2027 onward, since it is projected that the adverse effects of high crude oil prices will wane.
Projected year-on-year rate of increase in the CPI for fiscal 2026 is significantly higher, reflecting the rise in crude oil prices.
There are various risks to the outlook.
Necessary to pay particular attention to the impact of the future course of the situation in the Middle East on financial and FX markets.
Necessary to pay due attention to keep the risk of inflation significantly deviating upward from materializing.
Possible that the rise in crude oil prices is passed on to the price of various goods and services more easily than before.
Board’s core CPI fiscal 2026 median forecast at +2.8% vs +1.9% in January.
Board’s core CPI fiscal 2027 median forecast at +2.3% vs +2.0% in January.
Board’s core CPI fiscal 2028 median forecast at +2.0%.
Board’s real GDP fiscal 2026 median forecast at +0.5% vs +1.0% in January.
Board’s real GDP fiscal 2027 median forecast at +0.7% vs +0.8% in January.
Board’s real GDP fiscal 2028 median forecast at +0.8%.
BoJ Report on Risks
Possible that the rise in crude oil prices is passed on to the price of various goods and services more easily than before.
Attention will also need to be paid to the possibility that food prices could rise by more than expected through higher market prices for raw materials.
There is risk that large-scale disruptions in supply chains will occur, exerting a significant impact on the production activity of Japanese firms.
Regarding AI, strong business fixed investment could push up the global economy, but if profits do not expand in line with such investment, adjustment pressure could arise, accompanied by changes in asset prices.
Exchange rate developments are, compared to the past, more likely to affect prices.
Trade policies announced so far have partly led to a change in the trend of globalization.
Medium- to long-term inflation expectations have risen moderately.
Market reaction to the BoJ policy announcements
USD/JPY meets fresh supply and eases back toward 159.00 in an immediate reaction to the Bank of Japan’s (BoJ) no-rate-change decision, still down 0.08% on the day.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.04% | -0.08% | 0.06% | 0.08% | 0.16% | 0.12% | |
| EUR | -0.06% | -0.04% | -0.19% | -0.02% | -0.01% | 0.04% | 0.06% | |
| GBP | -0.04% | 0.04% | -0.13% | 0.00% | 0.04% | 0.10% | 0.09% | |
| JPY | 0.08% | 0.19% | 0.13% | 0.18% | 0.19% | 0.24% | 0.22% | |
| CAD | -0.06% | 0.02% | 0.00% | -0.18% | 0.01% | 0.06% | 0.06% | |
| AUD | -0.08% | 0.01% | -0.04% | -0.19% | -0.01% | 0.07% | 0.08% | |
| NZD | -0.16% | -0.04% | -0.10% | -0.24% | -0.06% | -0.07% | -0.01% | |
| CHF | -0.12% | -0.06% | -0.09% | -0.22% | -0.06% | -0.08% | 0.01% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
This section below was published on April 27 at 23:00 GMT as a preview of the Bank of Japan Interest Rate Decision.
- The Bank of Japan is expected to keep rates on hold, but a hike is not off the table.
- Uncertainty spurring from the Middle East war will take its toll on the decision.
- Macro fundamentals back the case for additional rate hikes in Japan.
The Bank of Japan (BoJ) will announce its monetary policy decision on Tuesday, at around 3:00 GMT. The BoJ is widely expected to deliver a hawkish hold, keeping the benchmark interest rate unchanged at 0.75% while also hinting at a willingness to hike rates. The latest change in interest rates took place in December, when BoJ officials hiked by 25 basis points (bps)
Japanese policymakers are between a rock and a hard place: The Middle East war is a global source of uncertainty, while the local macro puts pressure on policymakers to act promptly.
Hotter-than-expected inflation and a tightening labor market hint at faster interest rate hikes, which run counter to the BoJ officials’ views.
In the meantime, the Middle East war continues. Hopes for a quick resolution fade as time goes by, with the war about to turn two months old.
What to expect from the BoJ interest rate decision?
According to the latest available data, the Consumer Price Index (CPI) rose 1.5% YoY in March, up from 1.3% in February and above the 1.4% anticipated by market players. Core annual inflation, which excludes volatile food and energy prices, rose to 1.8%, up from the expected 1.5%. Meanwhile, the Unemployment Rate stood at 2.6% in February.
If the BoJ could base monetary policy solely on these data, policymakers should pull the trigger in this meeting. However, the ongoing crisis in the Middle East paints a different picture. Rising Oil prices and persistent supply disruptions are expected to have a profound and prolonged impact on inflation worldwide. Japan is no exception. That opens the door for a surprise interest rate hike, although we are talking about Japan, and surprises are not usually in their script.
Policymakers are well aware of the situation. In a press conference in Washington following the 20-G meeting, BoJ Governor Kazuo Ueda noted that higher Oil prices “pose both upside risks to prices and downside risks to the economy, making policy responses difficult.”
Ueda added: “Developments in the Middle East will be a crucial factor (for the BoJ’s policy decision), but the outlook remains quite uncertain.” Finally, he repeated the central bank’s commitment to price stability: “We will take the most appropriate response to achieve our 2% price target in a sustainable and stable way.”
Governor Ueda will offer a press conference following the rate announcement, as usual. And while market participants anticipate a hawkish lean, the focus will be on how hawkish Japanese policymakers are willing to be in such an uncertain environment.
How could the Bank of Japan’s monetary policy decision affect USD/JPY?
Heading into the announcement, market participants expect the BoJ to hold its fire but deliver at least 50 bps rate hikes through 2026. The monetary policy Board is likely to keep rates on hold in its April meeting, not because it is the right decision, but to prevent a market shock. Policymakers are likely to anticipate additional rates coming, which will not be a big surprise.
There are two quite hawkish scenarios. The first would be the BoJ actually triggering a rate hike. The second would be to directly pre-announce a rate hike at the next monetary policy meeting. Furthermore, if officials hint at worries about growth, something that so far they have avoided, the case for additional rate hikes will increase, and hence, boost demand for the Japanese Yen (JPY). The odds for any of those happening are quite limited.
A dovish announcement is off the table, given the ongoing Middle East war.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The USD/JPY pair trades in quite a limited range just below 160.00 since early April, driven by sentiment related to the Persian Gulf crisis. Speculative interest is looking at the US Dollar (USD) as the preferred safe-haven, with optimism boosting demand for the Greenback, and pessimism leading to USD sell-offs. The BoJ announcement, unless a surprise, is likely to have a limited impact on the pair.”
Bednarik adds: “From a technical point of view, the USD/JPY pair is neutral. In the daily chart, the pair develops around a flat 20-day Simple Moving Average (SMA), which has been unable to find a way since early April. The 100- and 200-day SMAs keep heading higher, far below the current level, in line with the former dominant bullish trend. At the same time, the pair develops not far below its 2026 peak in the 160.40 region. Finally, technical indicators head marginally lower within neutral levels, far from providing a clear directional clue. The pair could fall with a hawkish announcement, with a break below 159.00 opening the door for a test of the 158.40 region. Below the latter, the slide could continue towards 157.90. As previously noted, 160.00 provides resistance in the case of sudden JPY weakness, with additional gains aiming to retest the year high.”
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
Bank of Japan expected to hold rates amid Iran war-driven inflation fears
The Bank of Japan (BoJ) will announce its monetary policy decision on Tuesday, at around 3:00 GMT. The BoJ is widely expected to deliver a hawkish hold, keeping the benchmark interest rate unchanged at 0.75% while also hinting at a willingness to hike rates. The latest change in interest rates took place in December, when BoJ officials hiked by 25 basis points (bps)
Japanese policymakers are between a rock and a hard place: The Middle East war is a global source of uncertainty, while the local macro puts pressure on policymakers to act promptly.
Hotter-than-expected inflation and a tightening labor market hint at faster interest rate hikes, which run counter to the BoJ officials’ views.
In the meantime, the Middle East war continues. Hopes for a quick resolution fade as time goes by, with the war about to turn two months old.
What to expect from the BoJ interest rate decision?
According to the latest available data, the Consumer Price Index (CPI) rose 1.5% YoY in March, up from 1.3% in February and above the 1.4% anticipated by market players. Core annual inflation, which excludes volatile food and energy prices, rose to 1.8%, up from the expected 1.5%. Meanwhile, the Unemployment Rate stood at 2.6% in February.
If the BoJ could base monetary policy solely on these data, policymakers should pull the trigger in this meeting. However, the ongoing crisis in the Middle East paints a different picture. Rising Oil prices and persistent supply disruptions are expected to have a profound and prolonged impact on inflation worldwide. Japan is no exception. That opens the door for a surprise interest rate hike, although we are talking about Japan, and surprises are not usually in their script.
Policymakers are well aware of the situation. In a press conference in Washington following the 20-G meeting, BoJ Governor Kazuo Ueda noted that higher Oil prices “pose both upside risks to prices and downside risks to the economy, making policy responses difficult.”
Ueda added: “Developments in the Middle East will be a crucial factor (for the BoJ’s policy decision), but the outlook remains quite uncertain.” Finally, he repeated the central bank’s commitment to price stability: “We will take the most appropriate response to achieve our 2% price target in a sustainable and stable way.”
Governor Ueda will offer a press conference following the rate announcement, as usual. And while market participants anticipate a hawkish lean, the focus will be on how hawkish Japanese policymakers are willing to be in such an uncertain environment.
How could the Bank of Japan’s monetary policy decision affect USD/JPY?
Heading into the announcement, market participants expect the BoJ to hold its fire but deliver at least 50 bps rate hikes through 2026. The monetary policy Board is likely to keep rates on hold in its April meeting, not because it is the right decision, but to prevent a market shock. Policymakers are likely to anticipate additional rates coming, which will not be a big surprise.
There are two quite hawkish scenarios. The first would be the BoJ actually triggering a rate hike. The second would be to directly pre-announce a rate hike at the next monetary policy meeting. Furthermore, if officials hint at worries about growth, something that so far they have avoided, the case for additional rate hikes will increase, and hence, boost demand for the Japanese Yen (JPY). The odds for any of those happening are quite limited.
A dovish announcement is off the table, given the ongoing Middle East war.
Valeria Bednarik, Chief Analyst at FXStreet, notes: “The USD/JPY pair trades in quite a limited range just below 160.00 since early April, driven by sentiment related to the Persian Gulf crisis. Speculative interest is looking at the US Dollar (USD) as the preferred safe-haven, with optimism boosting demand for the Greenback, and pessimism leading to USD sell-offs. The BoJ announcement, unless a surprise, is likely to have a limited impact on the pair.”
Bednarik adds: “From a technical point of view, the USD/JPY pair is neutral. In the daily chart, the pair develops around a flat 20-day Simple Moving Average (SMA), which has been unable to find a way since early April. The 100- and 200-day SMAs keep heading higher, far below the current level, in line with the former dominant bullish trend. At the same time, the pair develops not far below its 2026 peak in the 160.40 region. Finally, technical indicators head marginally lower within neutral levels, far from providing a clear directional clue. The pair could fall with a hawkish announcement, with a break below 159.00 opening the door for a test of the 158.40 region. Below the latter, the slide could continue towards 157.90. As previously noted, 160.00 provides resistance in the case of sudden JPY weakness, with additional gains aiming to retest the year high.”
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Next release: Tue Apr 28, 2026 03:00
Frequency: Irregular
Consensus: 0.75%
Previous: 0.75%
Source: Bank of Japan
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Fed: Policy on hold as Iran shock lingers – TD Securities
TD Securities strategists Oscar Munoz and Eli Nir expect the Federal Reserve (Fed) to keep the Fed funds rate at 3.50–3.75% at the April Federal Open Market Committee (FOMC), with Chair Powell maintaining a neutral stance on future policy. They see the Fed remaining on hold until September 2026 as it assesses Iran-related risks, before delivering a gradual 75 bps of easing through March 2027.
Powell’s last meeting and path ahead
“The policy rate will remain at 3.50-3.75% at the April FOMC. The labor market remains in balance while headline inflation has picked up due to the oil shock. Given the still-heightened level of uncertainty, we expect the Committee will reiterate a message of patience.”
“With the DoJ [Department of Justice] dropping its investigation into Powell, it appears that this week could be Powell’s last FOMC meeting as chair. As we discussed in our note last week, whether or not Powell stays on as governor once Warsh is confirmed will be up to him. Powell may provide guidance on this in his press conference, but he could also choose to make a statement at a later time.”
“Warsh’s Senate hearing offered little clarity on near-term policy. We believe it will prove difficult for him to achieve cuts immediately given the heightened uncertainty from the Iran conflict. He reiterated criticism of the Fed’s inflation performance, balance-sheet size, and forward guidance.”
“We expect the Fed to remain on hold until September as they assess the developments in Iran and its impact on the economy. By then, inflation progress will have likely resumed, allowing for the Fed to continue its gradual move towards neutral. We look for 50bps total of easing this year in September and December with an additional 25bps cut in March 2027, ending with a Fed funds rate at 3.00%.”
“We continue to expect that if the economic impacts from Iran moderate, the Fed can resume easing in September on inflation progress. Underlying inflation will likely improve after tariff and oil impacts fade, and we see little inflation risk from the labor market as will be evident in Q1 ECI this week.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)