USD/JPY tested towards 155.20 after a hawkish hike from the Bank of Japan

The Bank of Japan raised its short-term policy rate to 0.5% from 0.25%

• This is the highest in 17 years
• The Bank also raised its price inflation forecast, all 6 projections were moved higher
• The Bank cited a more positive outlook on wage
  rises

There was no change to the BOJ’s guidance pledging to keep raising rates:

• “If
  the outlook presented in the January Outlook Report will be realized,
  the Bank will accordingly continue to
  raise
  the policy interest rate and adjust the degree of monetary
  accommodation.”

The yen has gained ground against the dollar and crosses:

This article was written by Eamonn Sheridan at www.forexlive.com.