Neutral
CAD/JPY faces pivotal support as yen hits 30-year high ahead of BOJ rate decision.
The CAD/JPY currency pair is encountering significant support levels as the Japanese yen reaches its highest point in 30 years, driven by expectations of a Bank of Japan (BOJ) rate hike to 1.25% on Friday. This anticipated policy shift contrasts with the Bank of Canada's recent decision to maintain rates at 2.25%, highlighting divergent monetary policies between the two nations. The outcome of the BOJ's decision is poised to be a critical factor influencing CAD/JPY's near-term direction.
Key points
- The BOJ is widely expected to raise its policy rate to 1.25% on Friday, the highest level since April 1995, following public pressure from Treasury Secretary Scott Bessent.
- The Bank of Canada held rates steady at 2.25% on September 2, with a mildly hawkish tilt, acknowledging a broadening economic recovery alongside rising inflation risks.
- August export data from Japan exceeded forecasts, driven by strong AI-chip demand, contributing to the yen's appreciation.
- The CAD/JPY pair is trading below its long-term ascending trendline from November 2025, with price now at 114.02, inside the 110.50–112.00 support zone that has held since early August.
Sources
AI-generated from public news sources. Not financial advice.
