The post USD/JPY strengthens above 156.50 as BoJ’s cautious tightening weighs on Japanese Yen appeared on BitcoinEthereumNews.com.

The USD/JPY pair gains ground to near 156.75 during the early Asian session on Monday. The Japanese Yen (JPY) softens against the US Dollar (USD) as traders have been disappointed with the slow and cautious pace of the Bank of Japan’s (BoJ) monetary tightening.  The BoJ raised its policy rate to 0.75% from 0.50%, the highest level in 30 years, at its December policy meeting. However, the Japanese central bank did not provide specific guidance on the pace of future hikes, which disappointed the market and weighed on the JPY.   On the other hand, the US Federal Reserve (Fed) is expected to cut the interest rates further in 2026, and US President Donald Trump openly pushes for a more dovish central bank chief. This, in turn, might undermine the Greenback against the JPY.  Trump said that he expects the next Fed Chairman to keep interest rates low and never “disagree” with him. The comments are likely to heighten concerns among investors and policymakers about Federal Reserve independence. “The biggest factor for the dollar in the first quarter will be the Fed,” said Yusuke Miyairi, a foreign-exchange strategist at Nomura. “And it’s not just the meetings in January and March, but who will be the Fed Chair after Jerome Powell ends his term,” Miyairi added.  The Fed has cut rates three times this year, and traders anticipate two rate cuts next year. Financial markets are pricing in nearly an 18.3% chance the Fed will cut interest rates at its next meeting in January, according to the CME FedWatch tool. 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…

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Filed under: News - @ January 1, 2026 11:17 pm