Japanese Yen Recovers Slightly Against USD, Bearish Bias Remains
The Japanese Yen (JPY) fell again in Asia to levels below 154.00 against the US currency, although there was no follow-through buying amid uncertainty over the Bank of Japan’s (BOJ) rate hike plans. Japan’s fragile minority government is expected to make it difficult for the BOJ to tighten its monetary policy. Moreover, the BOJ’s Summary of Opinions from its October meeting revealed that policymakers were divided on whether to raise interest rates again.
This, coupled with concerns over President-elect Donald Trump’s tariffs returning, supported the JPY. Meanwhile, Trump’s expansionary policies and corporate tax cuts will exert upward pressure on inflation, which could limit the scope for the Federal Reserve (Fed) to ease policy. This, in turn, continues to support the rise in US Treasury yields and validates the near-term negative outlook for the lower-yielding JPY.
Source: FXStreet
