USD/JPY remains close to the 160.50 intervention zone during the Asian session on Wednesday. Despite the BoJ’s rate hike to its highest level since 1995, Japan’s borrowing costs remain significantly lower than those of peer nations such as the US. Moreover, the BoJ’s more cautious stance on bonds undermines the Japanese Yen and supports the currency pair. Meanwhile, the US Dollar remains on the back foot amid the optimism over the US-Iran peace deal and ahead of the Fed policy decision, capping spot prices.
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