The Japanese yen fell in Asian trade on Friday against a basket of major rivals, extending losses against the dollar for the fourth straight session and plumbing three-week lows, and about to mark the second weekly loss in a row.

The losses are due to the Bank of Japan’s policy meeting, which was more cautious than expected, followed by somewhat bearish remarks by BOJ Governor Kazuo Ueda, hurting the odds of a rate hike in June.

The Price

The USD/JPY pair rose 0.4% today to 145.92, the highest since April  10, with a session-low at 145.14.

The yen lost 1.6% on Thursday against the greenback, the largest such loss in 2025 following the BOJ’s policy meeting.

Weekly Trades

The yen is down 1.6% so far against the dollar this week, on track for the second weekly loss in a row.

The BOJ

The Bank of Japan voted today to hold interest rates unchanged at 0.5%, the highest since 2008 as expected.

The vote was unanimous in favor of holding interest rates, as policymakers prefer to take more time to assess the impact of US tariffs on the export-heavy economy.

Policy Statement

The BOJ said in its policy statement that it’ll continue hiking interest rates if the economic and inflationary predictions were carried out.

It said it’ll continue to monitor economic developments and price without any preset projections, with a heavy reliance on data.

Economic Forecasts

The Bank of Japan reduced its 2025 growth forecasts from 1.1% to 0.5%, and the 2026 growth forecast from 1% to 0.7%.

It also reduced 2025 inflation forecasts to 2.2% from 2.4%, and the 2026 forecasts to 1.8% from 2.1%.

Japanese Rates

The current odds of a BOJ interest rate hike in June fell below 25%.

Now traders await more crucial Japanese inflation, wages, and unemployment data in upcoming days to gather more clues.

US West Texas Crude oil price tumbled 4% after reports about Saudi Arabia being prepared to tolerate current low oil prices, and could even announce production hikes next week.

On Wednesday, Reuters was told by five unnamed sources that the Saudis don’t intend to bolster the market with more supply cuts, as Riyadh’s advantage of being able to tolerate low prices is sustainable.

In fact, reports indicate the Saudis might even try to expand their market share after sacrificing for OPEC+ voluntary production cuts for too long.

Earlier this month, OPEC+ announced plans to accelerate the cartel’s plan to gradually remove voluntary production cuts through an aggressive output hike in May, amounting to 411 thousand bpd.

It also seems that the Saudi are trying to appease the Trump administration, which called on OPEC to intervene and reduce fuel prices through increasing production.

IMF’s Position

The International Monetary Fund expects recent gains in non-oil sectors in the Gulf region to compensate for the impact of lower prices.

In its latest report, the IMF expects the Gulf Cooperation Council’s countries to grow by 3% in 2025, and by 4.1% in 2026.

In order to stabilize the markets, OPEC+ has cut its total output by nearly 5.85 million bpd, or 5.7% of total global supplies, since 2022.

In March however, the organization went ahead with decisions to start hiking production from April and abandon the drive to reduce supplies.

Regional Outlook

The IMF expects the Middle East and North Africa region to grow by 2.6% in 2025, and 3.4% in 2026.

It’s a marked reduction from previous forecasts of a 4% growth rate in 2025, and 4.2% in 2026.

The IMF expects Saudi Arabia’s GDP to grow by 3% this year, and 3.7% next year, which is higher than its neighbors. 

Bahrain is expected to grow by 2.8% in 2025, with Qatar estimated at 2.4% this year, and Oman at 2.3%.

In another sign of brisk growth, the S&P ratings company raised Saudi Arabia’s credit rating from A to A+ with a stable outlook.

The fastest growing economy in the region is expected to be the UAE at 4% this year and 5% in 2026.

Facing Challenges

In its report, the IMF identified different challenges that could impact growth negatively, including trade tensions, geopolitical struggles, and climate shocks. 

Geopolitical tensions could disrupt trade, tourism, supply lines, and increase refugee dispersions in the region.

The IMF noted that the Middle East and North Africa remain highly exposed to extreme weather conditions, including drought and floods, which could impact growth.

Bitcoin rallied on Thursday to a three-month peak, resuming gains after a two-day hiatus amid a positive outlook as positive momentum dominates the crypto market. 

The currency is targeting the coveted $100,000 once more with strong cash inflow into bitcoin exchange funds in the US, boosting liquidity. 

The Price

Bitcoin rose 2.4% today at Bitstamp to $96,399, the highest since February, with a session-low at $94,141.

On Wednesday, bitcoin lost 0.2%, the second loss in a row under pressure from the stronger dollar.

Market Value 

The market value of cryptocurrencies rose by over $50 billion today to $3.110 trillion, the best since February.

Bullish Outlook

The crypto market moved within a limited range last week, which opened the way for a strong higher breakout in upcoming sessions.

Periods of calm sideways trading in the crypto market are usually followed by aggressive one-sided breakouts, with bitcoin likely surpassing $100,000 soon.

Bitcoin Exchange Funds

US bitcoin funds had inflows of over $3 billion over the past 9 days, with the series of increasing inflows capped by a drop of $56 million on Wednesday.

The US dollar rose in European trade on Thursday against a basket of major rivals, expanding the gains for the third straight session and hitting a two-week high amid positive developments for the US trade negotiations with major partners.

The dollar is also boosted as the odds of a US interest rate cut in May receded, with investors now awaiting important US unemployment claims and industrial data later today.

The Index

The dollar index rose 0.45% today to 100.08, marking a two-week high, with a session-low at 99.61.

On Wednesday, the index rose 0.45%, marking the second straight profit amid a positive outlook for trade negotiations.

The index lost 4.4$ in April, marking the third monthly loss in a row, and the heftiest since November 2022 as investors lost confidence in US assets.

Trade Developments

Chinese reports said the US has communicated with China recently to discuss tariffs, with President Donald Trump saying there’s a high probability of reaching a deal with China.

He also pointed to potential trade deals with India, South Korea, and Japan soon, as he seeks to utilize his tariffs to force beneficial results.

US Rates

Several Fed officials don’t believe there’s an urgent need to review monetary policies soon.

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.

The odds of such a cut in June stood at a healthier 65%.