Even with rate hikes, the yen continues to weaken

5/7After the meeting with Prime Minister Kishida, Governor Kuroda of the Bank of Japan(hereinafter the BOJ)stated that it would “watch the movements of the yen’s depreciation,”5/13and on reducing its government bond purchases, sparking a rapid rise in expectations for a shift in monetary policy toward tightening. However, in the foreign exchange market, the yen’s weakness shows no sign of stopping, and it has again climbed above the 156 yen level. This article explains the effects of BOJ rate hikes and the trajectory of the USD/JPY exchange rate.