Weak Yen! Weak Against the Dollar, But Threat of a Major Surprise from Japan
The Japanese Yen (JPY) continued to weaken against the US dollar throughout Asian trading on Wednesday. However, a sharp decline remains elusive. Pressure on the Yen stems from concerns about Japan's fiscal situation, a risk-on market environment, and uncertainty about when the Bank of Japan (BoJ) will raise interest rates again. These factors have kept the Yen weak.
However, the BoJ is expected to continue its gradual process of normalizing its monetary policy. This contrasts with the situation in the United States, where the market is increasingly speculating that the Federal Reserve (Fed) will lower interest rates. Expectations of a US interest rate cut are holding back the dollar's strength and potentially giving the Yen room to weaken further.
Furthermore, speculation is rife about intervention by Japanese authorities to stem the weakening of the domestic currency. This potential move has made market participants betting on Yen weakness more cautious. The combination of differing central bank policy directions and the threat of intervention means that the Yen's future movements remain uncertain and prone to surprises. (az)
Source: Newsmaker.id
