The yen faces a defining week as the BoJ decision nears

The BoJ decision could reset expectations for the yen

The Bank of Japan will announce its monetary policy decision on 16 June, and the meeting could become the key near-term catalyst for the yen. Markets are pricing more than a 90% chance of a rate increase to 1% from 0.75%, while also listening closely for any sign that another move could follow later this year.

That matters because expectations for a second hike remain far less settled. If the BoJ sounds more willing to tighten again, the yen could find support. If policymakers stop short of that, the market may focus instead on how much room remains for USD/JPY to keep pressing higher.

USD/JPY is back above 160 and that raises the stakes

USD/JPY has already pushed back above 160, returning to a level that carried heavy importance when Japanese officials intervened in the market in late April. That leaves traders watching the pair not only as a reflection of rate expectations, but also as a test of how far authorities may be willing to tolerate renewed yen weakness.

A sustained move above 160 could reopen the path towards the highs seen in July 2024 and potentially beyond them. In that sense, the BoJ meeting is not just about rates - it may help decide whether the market treats the latest break higher as justified or as another zone where intervention risk starts to rise again.

The technical picture still favours further upside pressure

From a technical perspective, the bias still leans towards further gains in USD/JPY. The RSI is trending higher and remains around 58, which suggests momentum is firm without yet pointing to an overbought market. At the same time, the 20-day moving average has been acting as support, while the upper Bollinger Band continues to define the next resistance zone.

That setup leaves room for the pair to move towards the 160.75 to 161.00 region before it meets more meaningful resistance. Unless the BoJ meaningfully shifts the market's assumptions, the chart suggests the pair can continue leaning higher first.

Source: TradingView, 15 June 2026

Lower oil prices may be one factor working in the yen's favour

One counterweight for the dollar-yen move is the recent easing in Middle East tensions, which has helped to push oil prices lower. That matters for Japan because the country is heavily dependent on imported energy, so lower oil prices can reduce both import costs and the foreign currency needed to pay for those imports.

If that trend continues, it could offer some support to the yen and ease pressure on the broader Japanese economy. For now, though, the market still appears more focused on the BoJ and on whether USD/JPY can extend its breakout without provoking a sharper response.