USD/JPY declines 0.15% to 159.64 after Bank of Japan policy announcement

The Japanese Yen (JPY) edged lower against the US Dollar (USD) following the Bank of Japan’s (BoJ) policy announcement, with the USD/JPY pair declining 0.15% to 159.64. The BoJ maintained its benchmark interest rate at 0.75% during its March 19 meeting, aligning with market expectations, while signaling potential future rate hikes if inflationary pressures persist. Governor Kazuo Ueda emphasized confidence in Japan’s inflation trajectory, noting that underlying price growth is expected to approach the central bank’s 2% target by late fiscal 2026. Despite the rate hold, the JPY underperformed as the BoJ left the door open for further tightening, tempering its post-meeting strength.

Meanwhile, global markets remain focused on the Federal Reserve’s (Fed) policy decision, scheduled for March 18. The Fed is widely anticipated to keep rates unchanged in the 3.50%-3.75% range, with the CME FedWatch tool indicating no likelihood of rate cuts before September. This inaction reflects ongoing inflation concerns driven by elevated oil prices, though global supply worries have eased slightly following the reopening of the Strait of Hormuz for select nations. The USD Index (DXY) has retreated to 99.50 after a two-day correction, as traders weigh the Fed’s projected hawkish stance.

Market participants will closely scrutinize both central banks’ forward guidance, particularly the Fed’s dot plot and the BoJ’s inflation projections, to gauge future monetary policy paths. The USD/JPY pair is likely to remain range-bound ahead of key economic data releases and geopolitical developments.

(https://www.fxstreet.com/news/japanese-yen-flattens-against-us-dollar-around-15900-in-countdown-to-feds-policy-202603180311): FXStreet, March 18, 2026
(https://www.mexc.com/news/946799): FXStreet, March 17, 2026
(https://www.fxstreet.com/news/japanese-yen-flattens-against-us-dollar-around-15900-in-countdown-to-feds-policy-202603180311): FXStreet, March 18, 2026