Yen Strengthens Slightly, Will There Be a Japanese Interest Rate Hike?
The Japanese yen (JPY) strengthened slightly in the Asian session on Thursday, recovering slightly from a nine-month low hit against the US dollar the previous day. This strengthening was driven by comments from Bank of Japan (BoJ) Governor Kazuo Ueda, who stated that Japan's core inflation was slowly approaching its 2% target. This reinforced market expectations that the BoJ would raise interest rates in the near future. Furthermore, there was speculation that Japanese authorities might intervene to limit further yen weakness, providing some support for the currency.
However, despite optimism regarding a possible rate hike, traders remained skeptical about the BoJ's plans given the pro-stimulus stance of Japanese Prime Minister Sanae Takaichi. Takaichi has expressed support for looser policies, creating uncertainty regarding the BoJ's future course of action. Meanwhile, optimism regarding the reopening of the US government also limited the strength of the yen, which typically serves as a safe haven in times of global uncertainty.
Meanwhile, the US dollar (USD) struggled to attract buyers due to speculation that the Federal Reserve (Fed) would cut interest rates and concerns that a prolonged US government shutdown could impact the economy. This made the market more cautious, and USD/JPY's movement remained limited. With uncertainty on both sides, market participants remained awaiting further developments regarding monetary policy in Japan and the US. (az)
Source: Newsmaker.id
