The Bank of Japan will be announcing their interest rate decision tonight. Even though the Yen has strengthened against every major currency except for the US and Canadian dollars, expectations for a rate hike is not one of the reasons why the Yen has rallied. With recent economic data still reflecting a weak economy, the Bank of Japan does not have any room to raise rates especially at a time when central banks around the world are pumping liquidity into the financial system. Also, Prime Minister Fukuda’s approval ratings are down 33 percent, which means the government will not support a rate hike. Therefore even if the BoJ is hawkish, the market may not believe them.