USD/JPY surges as BOJ delivers first rate hike to 30-year high

USD/JPY jumped 1.2% to 158.45 following the Bank of Japan's historic benchmark interest rate increase, marking the highest level in 30 years. The unexpected hawkish move signals Japan's decisive shift away from ultra-loose monetary policy, strengthening the yen temporarily before dollar bulls regained control. Japanese fixed-income assets experienced significant volatility, with 10-year JGB yields rising 15 basis points to 1.15%. The policy divergence between an increasingly hawkish BOJ and expectations of Fed rate cuts creates complex dynamics for USD/JPY. Technical analysis shows the pair breaking above 158.00 resistance, with momentum indicators suggesting potential extension toward 159.20. However, further BOJ tightening could cap gains, with support now established at 157.50. Traders should monitor Japanese inflation data and Fed communications for directional cues.