14.10.202602:28:35UTC+00Yen Weakens on Cautious BOJ Rate Outlook

The Japanese yen weakened to around 158.5 per dollar on Wednesday, erasing the prior session’s gains after reports indicated the Bank of Japan is reluctant to deliver a rare back-to-back interest rate hike this month, though it is still considering a possible move in December.

According to those reports, the central bank sees limited justification for consecutive rate increases unless there are clear signs of a marked rise in upside inflation risks. Meanwhile, BOJ Governor Kazuo Ueda said policymakers will continue to closely monitor bond yields, reiterating that long-term interest rates should be guided by market forces. His comments underscored a cautious stance on monetary policy as the BOJ moves further away from its previous strict yield-curve control framework.

The yen also remained under pressure from rising oil prices, as escalating hostilities between Saudi Arabia and Iran-backed Houthi rebels intensified concerns over potential supply disruptions in the Middle East.