Japanese Yen Drops to Fresh Multi-Month Low Against USD
The Japanese Yen (JPY) continued to weaken against its US counterpart for the fourth straight session on Thursday and slumped to its lowest level since July 24 during the Asian session.
Although Japan’s Producer Price Index (PPI) rose at the fastest annual pace in more than a year in October, investors appear convinced that domestic political uncertainty will make it difficult for the Bank of Japan (BOJ) to raise interest rates again.
Also, growing concerns over US President-elect Donald Trump’s possible tariff hikes and their impact on the Japanese economy continued to undermine the JPY.
Meanwhile, expectations that the incoming Trump administration’s expansionary policies could stimulate inflation kept the US Treasury bond yields elevated near multi-month highs, which further seemed to undermine the lower-yielding JPY. Additionally, the continuation of the so-called Trump trade war lifted the US Dollar (USD) to its highest level since November 2023 and acted as a tailwind for the USD/JPY pair.
However, intervention concerns could limit the JPY’s losses. This, along with bets for a 25 basis points (bps) interest rate cut by the Federal Reserve (Fed) in December, supported by Wednesday's US inflation data, might keep a lid on the pair.
Source : FXStreet
