Dollar Closes at 158.615 Yen After BOJ Holds Interest Rate at 1.25%
Key Facts
The dollar-yen pair closed at 158.615 yen per dollar on November 3, 2026, according to EL7 data, marking the session’s daily closing level. This followed the Bank of Japan’s decision on October 30 to keep its overnight interest rate near 1.25%. The guidance was approved by 8 votes to 1, in a decision that revealed differences within the policy board over the appropriate level of interest rates. On the same day, Finance Minister Satsuki Katayama said Japan and the United States had agreed to continue coordinating to ensure orderly yen movements. She added that the stance of readiness to act if markets saw disorderly moves had not changed.
Katayama said coordination with Washington aimed to ensure orderly yen movements, linking readiness to act to market disruption. She said, "There is no change in our stance of being ready to act if markets see disorderly moves." The minister also noted that the weak yen had raised import prices and broader inflation, adding to pressure on Japanese policymakers. These remarks leave the possibility of official action tied to market behavior, without announcing any specific intervention in the available evidence. They also put currency volatility at the center of the economic policy debate because of its impact on import costs and domestic prices.
The Bank of Japan’s October decision kept interest rates unchanged, but the vote was not unanimous. Policy board member Takata proposed guiding the overnight interest rate to around 1.5%, instead of the level approved by the board near 1.25%. His proposal showed that some on the board favored tighter monetary policy. The bank held its meeting on October 29 and 30, with the policy decision issued on the second day. The bank later set dates for publishing meeting documents, allowing members’ positions and details of their discussions to be followed.
The Bank of Japan raised its median forecast for core inflation, excluding fresh food, in fiscal 2027 to 2.6%, up 0.2 percentage points from its July report. The bank said price risks were tilted to the upside and that a weaker yen could push core inflation higher in the first half of the forecast period. In the second half, the bank expects inflation to fall toward 2%. This assessment places the currency’s effect on prices among the factors policymakers are monitoring. The updated forecasts also provide context for the decision to hold rates and differing views on their path.
On October 30, the yen had risen to 157.89 per dollar and was on track for a monthly gain of 0.11% in October, according to a Reuters report. The report linked the yen’s gains to improved inflation expectations following the Bank of Japan’s decision to hold interest rates and raise its price forecasts. It also noted, however, that the market viewed the yen as having weakened in its strengthening momentum, while the Federal Reserve’s stance continued to have an impact. This move recorded at the end of October provides context ahead of the November 3 session and differs from the pair’s close recorded in that session. On the assets it manages, the Bank of Japan decided to increase the pace of ETF sales to around 860 billion yen a year at book value, with the change to take effect in January 2027.
The Bank of Japan will publish a summary of opinions from its October meeting on November 10, 2026, at 8:50 a.m. Japan time, followed by the meeting minutes on December 23 at 8:50 a.m. The summary of opinions will come first, while the minutes will later provide a record of the meeting held on October 29 and 30. The October decision remains to keep interest rates near 1.25% by a vote of 8 to 1, alongside Takata’s proposal for a level of around 1.5%. The decision also included a change in the pace of ETF sales, to be implemented in January 2027. The two publication dates are the bank’s next announced milestones related to the meeting.