Yen Under Pressure Again! Political Issues and Japanese Interest Rates Unsettle Markets
The Japanese Yen (JPY) is again under selling pressure after strengthening against the weakening US Dollar. Ahead of the European session, the JPY is trading near its lowest level in a year, fueled by increasing political and economic uncertainty in Japan. Deteriorating Japan-China relations and news that Prime Minister Sanae Takaichi may call an early general election have made investors hesitant, especially with the uncertainty surrounding the Bank of Japan's (BoJ) next interest rate hike.
Nevertheless, the Yen still finds some support from its status as a safe-haven asset amid rising global geopolitical tensions. Meanwhile, the US Dollar is also weakening due to market concerns about the Federal Reserve's independence, holding back further gains. This situation has limited the movement of the USD/JPY pair for the time being.
Market participants are now cautiously awaiting US inflation data due this week for clues on the direction of Fed policy. However, fundamentally, uncertainty about BoJ policy and domestic factors in Japan continue to exert pressure on the Yen, opening up the opportunity for USD/JPY to strengthen again in the near term. (az)
Source: Newsmaker.id
