Yen pares gains on report BOJ leans toward 25bp hike

The market's immediate reaction to a widely anticipated 25bp hike—paring yen gains—signals that the size of the move is already priced in, making the central bank's forward guidance the real catalyst. This affects FX traders and anyone with yen exposure, as the focus shifts from the hike itself to whether the BOJ signals further tightening. The open question is whether this modest step marks the start of a sustained cycle or a one-off adjustment, which will determine yen direction beyond the decision.