Mizuho: Bank of Japan's dovish interest rate hike may push the dollar/yen towards the 158 level.

Masafumi Yamamoto and Masayoshi Mihara, strategists at Mizuho Securities, stated in their report that the market has already priced in the expectation of a rate hike by the Bank of Japan at today's policy meeting. However, if Governor Haruhiko Kuroda does not signal a next rate hike, the yen could face downward pressure. In a dovish rate hike scenario, this situation seems more likely to occur, with the USD/JPY exchange rate possibly testing the 157 level and potentially rising to the recent high of 157.89 touched on November 20. On the other hand, if Kuroda's comments shift market expectations for the next rate hike earlier, the focus will be on whether the USD/JPY can break below the key level of 154.35 touched on December 5. As overseas markets enter the holiday season, the foreign exchange market may stabilize or continue to trend following the Bank of Japan's policy adjustments.