USD Under Pressure from Downward Trend
The US dollar remains under pressure. MUFG analyst Lloyd Chan highlighted the US Dollar Index (DXY), which fell below 98.00—an area considered technically crucial. If the weakening continues, this could pave the way for a longer-term weaker USD.
According to MUFG, the DXY's latest decline was largely driven by the decline in USD/JPY. Although the Bank of Japan (BOJ) held interest rates at 0.75% last Friday, the BOJ instead raised its growth and inflation projections for fiscal 2026, signaling the yen's potential to remain strong.
Overall, MUFG sees risks tilted toward USD vulnerability, while USD/JPY has the potential for more volatile two-way movements. The market is now navigating uncertainty regarding possible intervention, changes in BOJ policy expectations, and the dynamics of PM Sanae Takaichi's fiscal policy.
Source: Newsmaker.id