Yen Under Pressure Again: Holding On? Intervention Coming?
The yen (JPY) weakened for three consecutive days and hit a new low against the US dollar in the Asian session. The BoJ Opinion Summary showed a still-mixed outlook on interest rate hikes. Junko Nakagawa's comments that the BoJ would be very cautious further fueled market confidence that the rate hike could be delayed, especially with speculation of a large stimulus package under Prime Minister Sanae Takaichi.
At the same time, global sentiment improved due to the prospect of an end to the US government shutdown. The yen's "safe haven" status became less desirable. The US dollar also received a boost from rising Treasury yields, pushing USD/JPY higher.
However, the market is wary of the risk of intervention by Japanese authorities to curb yen weakness. On the other hand, expectations of future Fed rate cuts could limit the dollar's strength. This means that USD/JPY's rise is not necessarily smooth sailing—there is the potential for "brakes" from Japanese intervention and the prospect of Fed easing. (az)
Source: Newsmaker.id
