USD/JPY flows: Buy the "leak", sell the fact

After the "leak" on Tuesday's New York session, USD/JPY has been front running the more hawkish expectations of 25bps hike. The BoJ officially hiked rates to 0.25% and announced 3 trillion JPY bond purchases reduction in two years in the Asia session and is met with some sell the fact trade. It is a more hawkish tilt as the forward guidance suggest more rounds of tightening to come while bond purchase reduction will be in a monthly 400b accelerating manner to roughly 3t in June 2026.

USD/JPY initially dipped by a figure to 151.59 before rebound to trade 0.24% to 153.11 with JGB yields outperforming the U.S. T-yields.