Yen Slips Further After BOJ Interest Rate Decision 2026 Holds Steady
The Japanese yen weakened slightly following the BOJ Interest Rate Decision 2026. Governor Kazuo Ueda's upcoming remarks and a 27-year high in JGB yields take center stage.
The Japanese yen is sliding once again. On January 23, 2026, the Bank of Japan (BOJ) concluded its two-day policy meeting by announcing it'll keep interest rates unchanged. According to Nikkei, while the decision was widely expected, it failed to provide a floor for the currency, which faced immediate selling pressure from international investors.
Impact of BOJ Interest Rate Decision 2026
Markets are now hanging on Governor Kazuo Ueda's upcoming remarks. The yen's weakness stems from growing skepticism over the Prime Minister's fiscal direction. This sentiment is palpable in the bond market, where the 10-year Japan Government Bond (JGB) yield recently soared past 2.2%—a 27-year high that highlights mounting fiscal jitters.
Fiscal Pressures and Banking Liquidity
Internal banking dynamics are adding to the complexity. Surplus funds at Japanese banks have shrunk to a 4-year low, potentially squeezing future investment. Despite BOJ revising its inflation forecast upward, the decision to hold rates steady indicates a cautious approach to avoid clashing with government spending risks.
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