The Bank of Japan's rate hike is already priced in, and the USD/JPY remains firm around the mid-160s.

【6/16Market Overview

During Tokyo time, at the Bank of Japan's Monetary Policy Meeting, a 0.25% rate hike was decided. Reactions were limited as the market had already priced in a rate increase in prior reports. Bank of Japan Deputy Governor Uchida, acting as the regular press conference host, stated that “the exchange rate itself is not a policy target but an important factor,” that “there was no proposal for a 0.50% rate hike,” and that “the discussion on the appropriate size of the balance sheet will still take a little more time.” However, market reaction was muted, with the yen trading in the lower-160s. In European trading hours, after Uchida’s press conference, there was a sense that timing and pace of further rate hikes were not clear, leading to expectations for earlier BOJ tightening to retreat and USD/JPY selling, sending the dollar/yen to0.５０% (0.50%)160.46yen. In New York time, when the Wall Street Journal (WSJ) reported that the U.S. may allow Iran to resume oil and fuel sales based on a memorandum of understanding with Iran, crude oil futures prices fell sharply. U.S. 10-year yields declined, and USD/JPY tumbled to100.33? (Note: likely 160.33)円まで失速to 160.33 yen. Subsequently, yen weakness led, and USD/JPY ended near160.48yen at the close.

【6/17Market Outlook