The Bank of Japan (BoJ) maintained its short-term interest rate at 0.75% during its latest policy meeting, a decision reached by an 8–1 vote, with board member Hajime Takata proposing an increase to 1.0% that was ultimately rejected by the majority [1][3][4]. This marks the second consecutive meeting where the BoJ has left rates unchanged, as policymakers weigh the impact of rising energy prices and ongoing global inflation pressures [4]. The BoJ stated it will continue to raise the policy rate if the economy and prices move in line with its forecasts, emphasizing vigilance regarding the effects of rising crude oil prices on underlying inflation [3].
Following the announcement, the Japanese Yen weakened against major currencies. The EUR/JPY pair rebounded to trade around 183.30, recovering from previous losses as the Yen softened [1]. Similarly, AUD/JPY held gains near 112.45, with the Yen under pressure after the BoJ decision [3]. The USD/JPY pair, however, was down 0.14% to near 159.70, attributed to US Dollar underperformance rather than Yen strength [4]. The Euro also showed relative strength, gaining 0.27% against the US Dollar and 0.20% against the Yen on the day [2].
Market participants are closely watching BoJ Governor Kazuo Ueda's post-meeting press conference for further guidance on the future policy path [1][3][4]. Ueda previously expressed confidence that underlying inflation would converge toward the BoJ's 2% target in the latter half of fiscal 2026 through fiscal 2027 [4]. Commerzbank strategist Hauke Siemßen noted that expectations for the European Central Bank (ECB) are likely to drive market moves, with forwards now fully pricing in a first ECB rate hike by September and only a 50% chance of another by year-end, reflecting persistent inflation concerns [1].
In related markets, the Australian Dollar faced headwinds from weaker domestic employment data, with the unemployment rate rising to 4.3% in February from 4.1% in January, above market expectations. This led money markets to lower the probability of a Reserve Bank of Australia (RBA) rate hike in May 2026 from 61% to 57% [3]. Meanwhile, the Federal Reserve left US rates unchanged at 3.50%-3.75% and signaled that policy adjustments would depend on inflation developments [4].
Technical analysis of EUR/USD indicates a mildly bearish bias, with the pair trading near 1.1490 and holding below key moving averages. The 14-day RSI at 37 confirms prevailing selling momentum, with primary support at the seven-month low of 1.1411 [2].
CONCLUSION
The BoJ's decision to keep rates steady at 0.75% led to broad Yen weakness against major currencies, with markets now focused on Governor Ueda's guidance for future policy direction. Persistent inflation concerns and shifting central bank expectations continue to shape currency moves, while weaker Australian jobs data and a steady Fed add to the cautious market tone. Overall, the BoJ's stance signals a wait-and-see approach amid global economic uncertainties.