The dollar rises against the Japanese yen, reaching its highest level in 5 months.

The US dollar made a strong leap against the Japanese yen during trading in the major foreign exchange market on Thursday, as developments in monetary policy and market expectations in this regard impacted the performance of the dollar-yen pair.

The US dollar had a strong rise by the end of yesterday's trading, outperforming all other major currencies; this was due to a change in the Federal Reserve's expectations regarding the terminal interest rate in 2025, which was adjusted to 4.4% instead of 3.9%.

This means that the US Federal Reserve is likely to cut interest rates only twice throughout the entire next year, after it was previously expected to reduce rates four times, which provided strong support for the dollar-yen pair.

The decision of the Bank of Japan issued this morning dealt another blow to the dollar-yen pair in trading; the central bank decided to maintain interest rates at 0.25%, without providing any future guidance on raising interest rates in the near term. The Bank of Japan also clarified that it is waiting to see wage and price trends before deciding to increase interest rates.

Current performance of the dollar-yen pair

In today's foreign exchange market trading, the dollar-yen pair jumped strongly by around 1.34%, trading near the level of 105.89 yen, which is the highest level for the pair in 5 months.