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Monetary Policy Summary, April 2026

At its meeting ending on 29 April 2026, the Monetary Policy Committee (MPC) voted by a majority of 8–1 to maintain Bank Rate at 3.75%. One member voted to increase Bank Rate by 0.25 percentage points, to 4%.

The conflict in the Middle East means that prospects for global energy prices are highly uncertain. Monetary policy cannot influence energy prices but will be set to ensure that the economic adjustment to them occurs in a way that achieves the 2% inflation target sustainably. The policy stance required to achieve this will depend on the scale and duration of the shock, and how it propagates through the economy.

The April Monetary Policy Report sets out three scenarios that help to illustrate a range of possible outcomes for the UK economy.

CPI inflation has increased to 3.3%, and is likely to be higher later this year as the effects of higher energy prices pass through. There is a risk of material second-round effects in price and wage-setting, which policy would need to lean against. But the labour market continues to loosen, and a weakening economy could contain inflationary pressures. Financial conditions have tightened since the conflict began, which will help to reduce inflation over time.

Taking all the risks to the economic outlook into account, the Committee judges that it is appropriate to maintain Bank Rate at this meeting.

The Committee will continue to monitor closely the situation in the Middle East and how its impact propagates through the economy. The Committee stands ready to act as necessary to ensure that CPI inflation remains on track to meet the 2% target in the medium term.

Minutes of the Monetary Policy Committee meeting ending on 29 April 2026

1: Before turning to its immediate policy decision, the Monetary Policy Committee (MPC) discussed key economic developments and its judgements around them, as well as its views on monetary policy strategy. The latest data and analysis underpinning these topics were set out in the accompanying April 2026 Monetary Policy Report.

The Committee’s discussions

2: The Committee’s discussions at this meeting focused on the economic impact of developments in the Middle East. Members distinguished between the direct, indirect and second-round effects on inflation of the continuing global energy supply shock. They also considered the role of slack in the economy in restraining medium-term inflationary pressures, and the appropriate monetary policy response in these uncertain circumstances.

3: Monetary policy could not affect global energy prices, and should generally look through the initial direct, and typically also some indirect, effects on domestic inflation from a negative energy supply shock. Monetary policy would transmit with too long a lag to impact these direct and indirect effects, but would need to lean against second-round effects in wage and price-setting that proved more persistent.

4: Some direct impacts from the recent energy supply shock were already visible, notably in higher household motor fuel prices, with CPI inflation having increased to 3.3% in March. Based on the energy futures curves in the 15 days to 22 April, Bank staff expected inflation to decline to 3.1% on average in 2026 Q2, before rising back to 3.3% in Q3. That Q3 projection was 1.4 percentage points higher than at the time of the February Monetary Policy Report. In addition to higher fuel prices, the upside news also reflected the projected increase in the Ofgem price cap that would affect household utility prices. The indirect effects of high energy prices via increased production costs were also expected to be significant, and likely to affect food prices particularly. CPI inflation was expected to rise somewhat further in Q4.

5: The Committee was attentive to the risk of second-round effects in wage and price-setting, the strength of which would depend, partly on how long energy prices remained elevated, as well as the nature of any behavioural response from households and firms.

6: Members broadly agreed that any second-round effects were likely to materialise more quickly via pricing channels than wage-setting. Agency intelligence and the DMP Survey suggested firms might look to increase some prices given compressed margins, although the extent of this would be constrained by weak demand. Household short-term inflation expectations had risen and appeared to be more sensitive to price increases relative to previous episodes. This was likely to reflect the recent experience of persistent above-target inflation following successive shocks, and the current and anticipated price increases in salient items, such as energy and food. For some members, these expectations, if sustained, could reinforce inflationary pressures through future wage bargaining as households sought to protect real incomes.

7: The MPC judged that, while there were likely to be some second-round effects, continued weakness in activity would limit the strength of these. But these effects were likely to be stronger, the larger and more persistent the rise in global energy prices. Relative to the previous energy shock in 2022, current events were occurring from a starting point of lower inflation, weaker demand, a looser labour market, and restrictive monetary policy. Wage growth had been easing towards target-consistent rates, while private sector wage settlements for 2026 had been largely completed before the shock occurred. These factors would constrain wage inflation this year, providing time to observe economic evidence. However, some members observed that higher inflation in the second half of this year could impact 2027 wage negotiations, as suggested by Agents’ contacts. Some other members saw downside risks to the outlook for demand, which could further limit second-round effects. In particular, unemployment could rise further owing to weak consumption and households increasing precautionary saving.

8: In monitoring the size and propagation of the shock, the Committee would draw upon the full range of economic data, surveys of firms and households, and intelligence from the Bank’s Agents. This monitoring would include developments in energy markets, the direct effects on UK inflation, and the extent to which firms’ adjustments to increased energy and non-energy costs were materialising through higher consumer prices relative to reduced profit margins. As it would take some time for second-round effects in wage and price-setting to become evident, members would monitor forward-looking indicators to allow timely assessments. This would include indicators of future wage growth and settlements, inflation expectations, firms’ own price expectations and the expected adjustment of firms’ margins. The Committee would also continue to monitor the impact of the shock on the real economy, including through indicators of the labour market and economic slack.

9: In light of the uncertainty about the strength of second-round effects, monetary policy would need to balance the costs of leaning too little against second-round effects against the costs of leaning against these risks too much. Energy shocks involved a trade-off between inflation and output. The Committee discussed the appropriate balance in these circumstances between returning inflation to target more slowly against risking further weakness in economic activity, and how that depended on the likely strength of second-round effects.

10: Section 3 of the April Report set out scenarios for the economy, based on different paths for energy prices and second-round effects. In Scenario A, energy prices were assumed to follow market futures curves, while in Scenarios B and C, these were higher and more persistent than the futures paths to varying degrees. There were no second-round effects from the latest energy shock in Scenario A. Second-round effects were incorporated in Scenarios B and C, and materially so in Scenario C.

11: The appropriate monetary policy response would be state-contingent. The scenarios illustrated that a more pronounced overshoot of inflation, as in Scenario C, was likely to warrant a forceful tightening in monetary policy. Given the absence of, or more modest, second-round effects in Scenarios A and B respectively, a less restrictive policy stance would be required than in Scenario C.

12: The appropriate policy response should also be robust across a range of scenarios, given the uncertainty about how the outlook would evolve. Members held different views on the likelihood of each scenario and the timing of any policy response. Some members might prefer to act early as insurance against risks to inflation persistence. Others might prefer to see more conclusive evidence of inflation persistence before acting. Such an approach might avoid unduly weighing on activity, or the risk of a subsequent policy reversal.

13: It was important to consider the appropriate policy stance in the context of financial conditions. All members noted that financial conditions had tightened materially since the onset of the conflict which would help feed through to lower inflationary pressures over time, particularly while further evidence accumulated in the coming months.

14: Looking ahead, the median expectation in the April Market Participants Survey was for Bank Rate to be maintained at its current level this year. By contrast, the market-implied path for Bank Rate in the 15 days to 22 April was upward-sloping, suggesting some increase in Bank Rate this year. This path captured not only market participants' central expectations for Bank Rate, but also the balance of risks to the outlook, and risk premia.

The immediate policy decision

15: The MPC sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. The MPC adopts a medium-term and forward-looking approach to determine the monetary stance required to achieve the inflation target sustainably.

16: Taking all the risks to the economic outlook into account, and recognising that the tightening in financial conditions would help to reduce inflation over time, most members preferred to maintain Bank Rate at this meeting. In reaching this judgement, there was a range of views across members. One view was that second-round effects could be modest and offset to a degree by the risk of weaker activity. Tighter financial conditions would provide insurance against a more adverse outcome for inflation, while further evidence accumulated in the coming months and policy could be re-assessed. Another view emphasised that material second-round effects were plausible and that tighter financial conditions could bear down on these pressures, with differing views on whether and when a tightening in monetary policy might be needed. One member judged that an increase in Bank Rate at this meeting was warranted, given the clear upward shift in risks to the lasting achievement of the inflation target.

17: The Chair invited the Committee to vote on the proposition that:

• Bank Rate should be maintained at 3.75%.

18: Eight members (Andrew Bailey, Sarah Breeden, Swati Dhingra, Megan Greene, Clare Lombardelli, Catherine L Mann, Dave Ramsden, Alan Taylor) voted in favour of the proposition. Huw Pill voted against the proposition, preferring to increase Bank Rate by 0.25 percentage points, to 4%.

MPC members’ views

19: Members set out the rationale underpinning their individual votes on Bank Rate.

Members are listed alphabetically under each vote grouping. References in parentheses relate to boxes in the April 2026 Monetary Policy Report. References to scenarios relate to those set out in Section 3 of the Report.

Votes to maintain Bank Rate at 3.75%

Andrew Bailey: The increase in energy prices from conflict in the Middle East represents a supply shock. So far, this shock differs from 2022 as the increase in energy prices has been smaller, monetary policy started more restrictive and the labour market is weaker. Pay pressures are continuing to ease gradually. Future higher pay demands could come up against firms’ margin constraints, a softer labour market and firms’ caution about passing on cost increases (Box B). This shock will induce a trade-off between higher inflation and softer output, and the appropriate policy response is state-contingent (Box G). If the shock appears to be short-lived or the economy weaker, policy should place relatively more weight on avoiding unnecessary contraction in activity. If second-round effects are likely to be greater, policy should focus on returning inflation back to target more quickly. At the moment, I place most weight on Scenario B, albeit with slightly reduced second-round effects. I place some weight on Scenario C, which would require a stronger monetary policy response. For now, the softer real economy makes it appropriate to maintain Bank Rate.

Sarah Breeden: Conflict in the Middle East represents a significant shock to the inflation outlook. Monetary policy cannot influence energy prices and so should generally look through their direct effects on inflation. But it can, and should, lean against the second-round effects as households and firms respond (Box G). The magnitude of such effects is state-contingent (Box C). In contrast to 2022, slack in the labour market should provide a meaningful restraint, particularly given weak demand. Absent the conflict, underlying disinflation remained on track. This counterfactual matters because financial conditions have tightened significantly since. This provides sufficient restrictiveness to guard against the current risk of second-round effects and gives us some time to learn more about the conflict and how it propagates. My vote balances the uncertainty around second-round effects. Firms and workers may be more attuned to salient prices, especially after a period of above-target inflation. But similarly, demand may weaken further, particularly given risks to consumption (Box E). At present, I place most weight on Scenario B. I do not judge Scenario C as likely, but if it were to materialise, I would stand ready to react, forcefully if necessary, to return inflation to target sustainably.

Swati Dhingra: The balance of risks around the inflation outlook has shifted to the upside. The UK economy will face higher energy prices, though how much higher and for how long makes all the difference. I am not strongly attached to any one of the energy price scenarios and A, B, and C all remain in play. In the event of a swift resolution and materially lower energy prices, further reduction in Bank Rate would be warranted, and possibly quickly. Alternatively, we could be faced with a sharper policy trade-off under a larger and longer energy shock. Labour market slack, weak demand and restrictiveness from the previous tightening cycle should already be weighing against sustained momentum in second-round effects under scenarios closer to B (Boxes C and E). If the situation were to worsen, this may warrant some tightening, but there is a limit to how much output loss should be acceptable.

Megan Greene: The risks to inflation from this energy shock are to the upside, even if the conflict ends soon, given the size of the shock and extent of infrastructure damage. Before the conflict, I was already concerned that the disinflationary process might be slowing and our policy stance was not meaningfully restrictive. Since then, PMI data show increased input and output prices. The DMP Survey and Agency intelligence suggest businesses intend to pass some rising costs onto consumers (Box B). Household inflation expectations rose this March more than in March 2022 (following Russia’s invasion of Ukraine), suggesting household attentiveness to inflation is heightened after five years of above-target inflation. Given slack in the labour market, I am more worried about the price-setting than wage-setting channel of second-round effects (Box C). In my view, second-round effects in Scenario B represent a lower bound for what is likely. We may end up with inflation somewhere between Scenarios B and C, necessitating a tighter stance. For now, the yield curve has tightened enough to give us time to hold and learn, if not much about second-round effects soon then at least about the nature of the shock. An increase in Bank Rate may be necessary in upcoming meetings.

Clare Lombardelli: Conflict in the Middle East has severely disrupted energy markets, with significant global and domestic economic implications. Prior to the conflict, domestic inflationary pressures had reduced but were lingering. Consumers and businesses have faced sustained above-target inflation in recent years, which will affect behaviour, expectations and reactions to price rises. Agency intelligence and the DMP Survey indicate that firms will look to pass on cost rises given previous margin squeezes (Box B). However, there are downside risks to activity. Faced with uncertainty, I place more weight on the economy evolving as in Scenario B, given its more realistic outlook for both energy prices and second-round inflationary effects than Scenario A. A tightening in monetary and financial conditions relative to before the war is warranted. Holding rates provides an appropriate degree of restrictiveness while we learn more about the scale of the shock and its propagation. While I do not view Scenario C as a central case, it is plausible, and would require policy to respond more forcefully to inflationary pressures.

Catherine L Mann: Against the backdrop of Middle East conflict, and given the underlying model structure, the scenarios overestimate both the projected opening up of slack and the moderation of inflation. On labour market slack, Agency intelligence and staff analysis points to stagnation, not a broad-based weakening. On pricing power, Agency intelligence and the DMP Survey suggest that firms likely possess more pricing power than embodied in the scenarios. Household inflation expectations have risen notably, which could sustain firms’ pricing power, and could continue to rise given price increases in salient items like energy and food. Inflation continuing to rise through 2026 could be embedded in 2027 via wage bargaining and state-dependent pricing. On balance, I expect greater additional second-round effects than in the scenarios. Given this assessment, it is not surprising that the market-implied path for Bank Rate has increased since the conflict began, tightening financial conditions. An ‘active hold’ now – emphasising concerns over inflation persistence, while acknowledging implications for employment and activity – allows for more readings on salience, attentiveness, and threshold effects. Should I see continued rising inflation outturns and expectations, I would expect to increase Bank Rate so as to lean against inflation rising into 2027.

Dave Ramsden: The outlook for the Middle East conflict remains highly uncertain, with upside risks to inflation from the energy shock, but also downside risks to medium-term inflation if demand weakens materially. Direct energy effects are already feeding through into CPI inflation and recent business surveys suggest the potential for sizeable indirect price impacts, though with some cost increases likely to be absorbed by firms’ margins (Box B). Set against that, the labour market continues to weaken and demand is subdued, such that second-round effects in wage and price-setting are likely to be limited (Boxes C and D). Holding Bank Rate continues for me to be the most appropriate response to the ongoing uncertainty. Looking ahead, my approach to managing any trade-off between inflation and output will be outlook and state-dependent (Box G). I see upside risks to energy prices relative to futures curves and so place equal weight on Scenarios A and B, though do not completely rule out Scenario C. Under Scenario B, I would consider raising Bank Rate and accepting a larger output gap as a result. If, however, some of the downside risks in Scenario A materialise, I would favour a less restrictive path.

Alan Taylor: At this stage, the historical example of 2011 is a better comparison for this shock than 2022; this is true both in terms of magnitude and the starting point of a weak economy (Boxes C and E). Wage growth has softened to target-consistent rates in the presence of slack. Inflation is above our February forecast through direct effects, with early signs of cost pass-through. With wage settlements largely agreed for this year, we are unlikely to learn quickly about the important question of second-round effects. The scenarios in the Report should communicate that our strategy is state-contingent. I currently place more weight in the zone between Scenario A and the path with standard treatment, where conflict subsides and energy prices moderate to year-end, with legacy damage to the UK and other economies. This would entail a hold for some time, then a move to a neutral or accommodative stance. We will know more by June or July about the likely conflict scenario. Given neutral at 3%, it makes sense to hold, for risk-management reasons and because the tighter financial conditions since the conflict began are amply restrictive to provide insurance against inflation risks if we eventually face the not-implausible Scenario B or the more extreme Scenario C.

Vote to increase Bank Rate to 4%

Huw Pill: Events in the Gulf have left the outlook for global energy prices elevated and more uncertain. That uncertainty is unlikely to dissipate soon, but it is nonetheless clear that higher energy prices represent an inflationary shock to the UK economy. Second-round effects in price and wage-setting stemming from this shock have the potential to raise UK inflation beyond the near term in a persistent manner. Our scenarios illustrate how a stronger impulse to inflation may strengthen second-round effects. But I see the risk of second-round effects in each of these scenarios as skewed to the upside. I recognise that second-round effects may be more modest with a looser labour market (Box C). But structural change in price and wage-setting, and the impact on inflation expectations of greater attentiveness to, and salience of, energy and food prices, may strengthen second-round effects beyond what is captured in those scenarios. As someone already concerned about a stalling of the underlying disinflation process even before the latest energy price shock, a prompt but modest hike in Bank Rate will help mitigate upside risks to price stability stemming from a re-emergence of intrinsic inflation persistence.

Operational considerations

20: On 29 April, the stock of UK government bonds held for monetary policy purposes was £525 billion.

21: The following members of the Committee were present:

• Andrew Bailey, Chair
• Sarah Breeden
• Swati Dhingra
• Megan Greene
• Clare Lombardelli
• Catherine L Mann
• Huw Pill
• Dave Ramsden
• Alan Taylor

Brian Bell was present as the Treasury representative.

David Roberts was present on 22 and 27 April, as an observer for the purpose of exercising oversight functions in his role as a member of the Bank’s Court of Directors.

Key takeaways

• Verbal intervention triggered a sharp reversal: USD/JPY hit 160.73 before a “final warning” from Japan’s FX official sparked a 0.9% drop, with the yen posting its strongest daily gain since mid-March.
• Key technical levels in focus: Immediate supports lie at 159.05, 158.60 (50-day MA), and 157.50, while resistance remains at 160.45, 160.74, and 161.16.
• Policy risk could drive next move: Upcoming ECB and BoE decisions may influence USD/JPY direction, with any hawkish tone potentially reinforcing downside pressure following intervention fears.

The USD/JPY has pushed higher to hit an intraday high of 160.73 today at 2.15 pm mark (Singapore time) that surpassed above the previous “intervention zone’ of 160.23/45.

Interestingly, at around 3:45 p.m. (Singapore time), the Japanese Vice Finance Minister in charge of FX affairs, Atsushi Mimura, issued a stern warning as quoted and translated: “Let me say this as my final advisory if you want to escape.” A clear shot to speculators that a “red line” is fast approaching for actual intervention in the FX market.

The USD/JPY tumbled by 0.9% from 160.73 intraday high to trade at a current level of 159.37 at this time of writing. On a daily basis, the Japanese yen has strengthened by 0.7% against the US dollar so far, its strongest daily gain since 19 March 2026.

Below are the key intraday technical levels to watch

Fig. 1: USD/JPY minor trend as of 30 Apr 2026 London session (Source: TradingView).

Fig. 2: USD/JPY medium-term trend as of 30 Apr 2026 London session (Source: TradingView).

Supports:

• 159.05 (ex-post BoJ’s monetary policy meeting low on 28 April 2026)
• 158.60 (also the 50-day moving average)
• 157.50 (19 March 2026 low & congestion area from 9 February 2026/10 March 2025) (see Fig. 2).

Resistances:

• 160.45 (pivotal), 160.74, and 161.16 (see Fig. 1).

The next fundamental events that may have an impact on the USD/JPY will be the ECB and BoE monetary policy meetings in the next one to two hours.

Standing pat is expected on both ECB and BoE policy interest rates, but any hawkish monetary policy guidance may see a further slide in the USD/JPY.

That’s indeed a “sly final verbal warning” FX intervention conducted by Japanese authorities.

Eurozone inflation accelerated in April, with headline CPI rising from 2.6% yoy to 3.0% yoy, matching expectations and marking the highest level since 2023. In contrast, core inflation—which excludes energy, food, alcohol, and tobacco—eased slightly from 2.3% yoy to 2.2% yoy, indicating that broader price pressures are not intensifying at the same pace.

The move highlights the renewed impact of energy prices on the inflation outlook, even as underlying pressures remain more contained. The surge in headline inflation was driven primarily by energy, where prices jumped sharply from 5.1% yoy to 10.9% yoy.

Services inflation moderated from 3.2% yoy to 3.0% yoy, suggesting some easing in domestic demand-driven components. Other categories showed more modest movements. Food, alcohol, and tobacco inflation edged up from 2.4% yoy to 2.5% yoy, while non-energy industrial goods rose from 0.5% yoy to 0.8% yoy.

Full Eurozone CPI flash release here.

Eurozone economic growth softened in the first quarter, with GDP rising 0.1% qoq, down from 0.2% in Q4 and below expectations of 0.2%. On an annual basis, growth came in at 0.8% yoy, reflecting a modest expansion but underscoring the region’s fragile momentum.

The broader EU economy showed a similar pattern, with GDP also rising 0.1% qoq, easing from 0.2% previously, while annual growth stood at 1.0% yoy.

At the country level, performance was uneven. Finland led quarterly growth with a 0.9% increase, followed by Hungary at 0.8%, and Estonia and Spain at 0.6%. Germany's GDP rose 0.3% while France was flat. In contrast, Ireland saw a sharp contraction of -2.0%, while Lithuania (-0.4%) and Sweden (-0.2%) also recorded declines.

Full Eurozone GDP release here.

Gold is trading at around 4,550 USD per ounce on Thursday, remaining close to its monthly lows. Pressure on the metal continues to build as rising energy prices fuel inflation expectations and increase the likelihood of tighter monetary policy from the world’s major central banks.
Donald Trump stated that the US will maintain its naval blockade of Iran until a nuclear agreement is reached. Tehran responded by accusing Washington of using economic restrictions and internal destabilisation as tools of political pressure.

The prolonged conflict in the Middle East, coupled with the effective closure of the Strait of Hormuz, continues to unsettle global markets. Investors are scaling back expectations for interest rate cuts this year and are beginning to price in the possibility of rate hikes in 2027.
As widely expected, the Federal Reserve left interest rates unchanged. However, several policymakers openly dissented, underscoring growing divisions within the Fed amid heightened uncertainty.

Technical Analysis

On the H4 chart, XAU/USD is trading within a consolidation range above the 4,515 USD level. A move higher could open the way for a corrective rebound towards 4,767 USD. On the downside, a further decline towards 4,500 USD is possible. The MACD indicator supports the current recovery scenario, with the signal line below the zero mark but pointing firmly upwards, indicating strengthening bullish momentum.

On the H1 chart, the market has broken above the 4,560 USD level and is continuing its upward move towards 4,650 USD. A short-term pullback towards 4,560 USD remains possible as a retest from above, after which the price may resume its advance towards 4,770 USD. The Stochastic oscillator supports this view, with the signal line rising steadily towards 80, suggesting growing upside momentum.

Conclusion

Gold remains under pressure from persistent inflation concerns and hawkish central bank expectations, but signs of short-term stabilisation are emerging. While geopolitical tensions continue to support safe-haven demand, the broader direction for gold will depend on whether inflation fears or expectations of tighter monetary policy prove to be the stronger market driver.

Japan’s verbal intervention proved effective once again, with USD/JPY quickly retreating below the 160 level after briefly spiking to 160.71, its highest since mid-2024. The sharp pullback highlights how sensitive markets remain to official rhetoric when 160 red line is breached.

Finance Minister Satsuki Katayama escalated warnings, stating that the timing for taking “bold steps” is “now nearing.” In the context of Japanese policy communication, such language is widely interpreted as a direct signal of potential currency intervention. The move comes as authorities attempt to curb excessive Yen weakness driven by widening rate differentials and rising energy prices.

Katayama also stressed that officials would remain vigilant during the Golden Week holidays, a period typically marked by thinner market liquidity. “Whether you’re out and about or at rest, please don’t put your smartphones down,” she said, signaling readiness to act at any time.

For now, the message appears to have achieved its immediate objective, deterring further speculative pressure, though the durability of Yen strength will depend on whether rhetoric is backed by action.

Key takeaways

• Yen weakness persists despite intervention risks: USD/JPY surged to a 21-month high above 160.45, brushing off verbal intervention warnings as bullish momentum remains firmly intact.
• Macro drivers favour further upside: Rising oil prices and a widening US–Japan rate differential (Fed more hawkish vs BoJ’s gradual stance) continue to pressure the yen, reinforcing USD/JPY’s uptrend.
• Technical structure supports continuation: Price action remains within a rising channel above 159.85 support, with momentum indicators signalling further upside potential toward 161.16 and beyond unless a breakdown triggers a pullback.

The Japanese yen had staged a mild gain of 0.5% to print a 5-day high of 158.96 per US dollar ex-post the Bank of Japan's (BoJ) monetary policy meeting on Tuesday, 28 April 2026.

BoJ advocated a “hawkish hold” on its cash policy rate at 0.75%, with three officials dissenting (opting for a rate hike), which represented the biggest divide under Ueda’s governorship.

Overall, the BoJ has continued to guide the market along the lines of its “gradual interest rate hike” stance; in turn, short-term interest rate swaps traders are pricing a 66% chance that the BoJ may enact an interest rate hike when it sets policy again on 16 June 2026.

However, the gains on the yen were short-lived despite recent “stark and forceful” verbal intervention remarks made by Japan's Finance Minister Katayama on 23 April and 28 April, expressing concerns on a weakening yen with authorities standing ready to respond as needed to move in the currency market around the clock.

Higher oil prices and hawkish dissents in the Fed ignite another rout in JPY

Fig. 1: Medium-term trends of USD/JPY & WTI crude oil with correlation coefficient as of 30 Apr 2026 (Source: TradingView).

The movement of the USD/JPY has a significant direct correlation with WTI crude. They move in tandem as Japan imports approximately 95% of its crude oil from the Middle East, and oil fuels Japan’s key export-oriented sectors like automotive and manufacturing.

Hence, without any clear signs from the US and Iran to reopen the Strait of Hormuz, a critical waterway for global oil and energy flows, it increases the risk of stagflation in Japan, putting the BoJ in a dilemma to maintain its “gradual interest rate hike” monetary policy stance (a negative for the JPY).

The WTI crude oil has rallied by 38% since 17 April 2026 to trade at an intraday level of $110/barrel at this time of writing, erasing its losses since the start of the US-Iran ceasefire agreement on 7 April.

The recent hawkish messaging from the US White House administration towards Iran, continuation of the US Navy blockage in the strait, Trump’s rejection of Iran’s latest proposal to reopen the waterway, and the latest report by Axios, today, that highlighted US military commanders are set to present President Trump with fresh options for military action against Iran on Thursday, 30 April.

Given that the USD/JPY has a high direction correlation of 0.72 (20-day rolling) with WTI crude oil, with the near-term bullish trend remaining intact for WTI crude oil (three consecutive daily closes above its 20-day moving average at $99.50/barrel), there is a high probability that the USD/JPY is likely to face further upside pressure in the near-term (see Fig. 1).

Fig. 2: US-Japan implied interest rate policy curve spread as of 29 Apr 2026 (Source: MacroMicro).

The monthly implied future policy interest rate curves for the US and Japan are calculated using short-term interest rate futures that are highly sensitive to the expectations on these countries’ central banks' monetary policies (the Fed and BoJ, respectively.

The current US/Japan implied interest rate policy curve spread for June 2026 has flattened, but it has shifted upwards to 2.74% from 2.46% three months ago (see Fig. 2), reinforced by three US Federal Reserve officials who dissented against an “easing bias” in yesterday’s FOMC monetary policy statement.

These observations suggest that the Fed is likely to be more hawkish or less dovish than the BoJ, which may prevent the Japanese yen from altering its major downtrend phase against the US dollar in place since May 2025.

Let’s focus now on the short-term trajectory (1 to 3 days) of the USD/JPY from a technical analysis perspective.

USD/JPY – Rallied to a 21-month high and cleared above 160.45 “intervention level”

Fig. 3: USD/JPY minor trend as of 30 Apr 2026 (Source: TradingView).

The “red hot” USD/JPY has continued its climb upwards and hit a 21-month intraday high of 160.67, clearing above the prior intervention level zone of 160.23/45, where Japanese authorities stepped into the currency market on 26 April 2024.

Watch the 159.85 key short-term pivotal support on the USD/JPY to maintain its ongoing minor uptrend phase from 17 April 2026 low, with the next intermediate resistances coming in at 160.74 and 161.16 (also a Fibonacci extension) (see Fig. 3).

A clearance above 161.16 may see a further push up to test the 161.80/95 key long-term pivotal resistance, where prior intervention took place in early July 2024.

However, a bearish reversal and an hourly close below 159.85 invalidates the near-term bullish tone for a corrective pull-back to expose the next intermediate supports at 159.05 and 158.60 (also the 50-day moving average).

Key elements to support the near-term bullish bias on USD/JPY

• The price actions of the USD/JPY have continued to oscillate within a minor ascending channel since the 17 April 2026 low of 157.59, with its upper boundary at around 161.16.
• The hourly RSI momentum indicator has continued to flash out bullish momentum conditions as it printed a series of “higher lows” above the 50 level.

Market Overview

The crypto market cap has fallen by 1.09% over the past 24 hours to $2.53 trillion. This marks the third consecutive day of a gradual market decline, which appears to be a technical shake-out rather than a trend reversal. Dogecoin (+3.3%) is once again leading the gains, along with Tron (+0.6%) and Aptos (+0.1%). Among the underperformers are Aave (−5.7%), Trumpcoin (−5.3%) and The Graph (−5.3%).

Bitcoin is leading the decline in cryptocurrencies, having switched to a sell-on-rally mode over the last three days. This is clearly visible in the intraday pattern of recent days, where a gradual rise has given way to a decline at roughly the same pace. If we view the latest move as a technical correction, its potential target appears to be the area around $74K, where the 61.8% Fibonacci retracement line lies. The March peak levels also lie here, reinforcing the significance of this level.

Dogecoin stands out modestly from the crowd of altcoins, leading the growth of top coins for the third day in a row and marking the fifth week of an uptrend. The $0.087 area has become a pivot point, where the coin also saw steady demand in 2024 and where there were strong buy orders on the slippage in October 2025. At the same time, current prices near $0.105 are more than 20% above that level, indicating the start of a bull market, according to traditional financial metrics. It is still too early to speculate on expectations of multiple-fold growth, as was the case two years ago, since this would require a radical shift of all cryptocurrencies into a bull market. But who knows, perhaps we are seeing the first signs of recovery after the crypto winter?

News Background

The crypto market entered a neutral phase in the second quarter: there is no clear trend, and economic and political factors are having a key influence on market dynamics, according to Coinbase. Events in the Middle East and fluctuations in oil prices remain among the main drivers.

Net inflows of Bitcoin to trading platforms have risen to 30-day highs, notes analyst Woominkyu. In his view, whales are transferring assets to exchanges for subsequent sale.

Spot trading volumes for Bitcoin on leading exchanges have fallen to their lowest levels since September–October 2023, notes analyst Darkfost. Alphractal also highlights the cooling of investor interest. The number of Google searches for cryptocurrencies has reached a three-year low.

73% of respondents believe Bitcoin’s current price is undervalued, according to a survey of 100 institutional and private investors conducted by Coinbase and Glassnode. They remain cautiously optimistic and expect most digital assets to recover within the quarter.

The Governor of the Czech National Bank has proposed adding Bitcoin to the central bank’s reserves to help control inflation. Despite its volatility, BTC could generate long-term returns, so it makes sense to allocate 1% of the state reserves to it.

The US dollar continues to trend upwards following the Federal Reserve meeting, drawing support from the regulator’s moderately hawkish stance and comments by Jerome Powell. Markets interpret the Fed’s rhetoric as a signal that restrictive policy is likely to remain in place for longer, supporting higher yields and sustaining demand for dollar liquidity.

Another factor is the anticipation of upcoming US macroeconomic releases, which could act as a trigger to confirm the current trend. Market participants remain cautious, assessing the outlook for inflation and overall economic conditions. This is keeping the dollar close to recent highs and creating conditions for further directional movement.

USD/JPY

The USD/JPY pair has tested its high for the current year, underlining the continued strength of the dollar in the present market phase. The move is supported by monetary policy divergence, with the Federal Reserve maintaining a tighter stance while the Bank of Japan continues to adhere to a more accommodative approach.

In the short term, two scenarios are possible. If positive expectations for the US economy persist and there are no signs of policy easing from the Fed, the pair may extend its advance towards the 2024 highs near 162.00. On the other hand, profit-taking and caution ahead of key data releases could trigger a local correction, pulling the pair back towards the 159.60–160.00 range.

Key events for USD/JPY:

• today at 15:30 (GMT+3): US GDP;
• today at 15:30 (GMT+3): US core personal consumption expenditures (PCE) price index;
• tomorrow at 02:30 (GMT+3): Tokyo core consumer price index (CPI), Japan.

USD/CHF

The USD/CHF pair is shifting into a corrective rebound after its previous decline, supported by the strengthening dollar. Technical analysis suggests potential growth towards 0.7940–0.7960, as a V-shaped reversal pattern has formed on the daily timeframe. However, if the pair settles below 0.7900, the downward movement may resume.

Key events for USD/CHF:

• today at 10:00 (GMT+3): Switzerland’s KOF leading economic indicator;
• today at 17:00 (GMT+3): Atlanta Fed GDPNow estimate;
• today at 23:30 (GMT+3): US Federal Reserve balance sheet.

Overall, the dollar remains in an upward phase, though its дальнейшая trajectory will depend on a combination of Fed signals and incoming data. The market is considering both the continuation of US dollar strength and the possibility of a short-term correction from current levels. The reaction to macroeconomic data will be decisive in confirming either scenario.

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Daily Pivots: (S1) 215.64; (P) 215.97; (R1) 216.52; More...

Intraday bias in GBP/JPY is back on the upside as up trend resumed. Further rise should be seen to 61.8% projection of 199.04 to 214.98 from 209.58 at 219.43. On the downside, below 214.92 support will turn bias neutral again first, and bring consolidations before, before staging another rally.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Firm break of 214.98 will target 61.8% projection of 148.93 (2022 low) to 208.09 (2024 high) from 184.35 at 220.90. This will remain the favored case as long as 55 W EMA (now at 205.25) holds, even in case of another deep pullback.