USD/JPY rises near 156.00 as BoJ maintains bond purchases

• The USD/JPY appreciates while the BoJ maintains its bond purchase amounts from the previous operation.
• Former BoJ chief economist Toshitaka Sekine suggested the central bank could raise the rate three times in 2024.
• The US dollar strengthens as the Fed maintains a cautious stance on the prospect of interest rate cuts in the current year.

USD/JPY rises near 155.90 during the European session on Friday as the Japanese Yen (JPY) faces renewed pressure. This was caused by the Bank of Japan (BoJ) maintaining its bond purchase amounts from the previous operation, choosing not to surprisingly reduce debt purchases at the beginning of the week.

Traders speculate that the BoJ could reduce bond purchases at the June policy meeting. BoJ Governor Kazuo Ueda also mentioned that there are no immediate plans to sell the central bank's ETF holdings.

In an interview with Bloomberg, former BoJ chief economist Toshitaka Sekine suggested that the Bank of Japan could raise its benchmark interest rate by up to three times this year. Sekine indicated the next move could come as soon as June, given the ample room available to adjust its current “overly” flexible setup.

The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against six major currencies, is trading around 104.60 after recovering from a multi-week low of 104.08 marked on Thursday. The Federal Reserve (Fed) maintains a cautious stance regarding inflation and the possibility of rate cuts in 2024.

Reuters reported on Thursday that Atlanta Fed President Raphael Bostic said at an event in Jacksonville that patience with interest rates is needed, noting that substantial price pressure remains on the U.S. economy. Additionally, Cleveland Fed President Loretta Mester indicated that it may take longer than anticipated to confidently determine the path of inflation, suggesting that the Fed should maintain its restrictive stance for an extended period.