Japanese Yen Steady amid Doubts Over BOJ Rate Hike Plans
The Japanese Yen (JPY) remained weak against its US counterpart and traded around a six-month low during the Asian session on Wednesday (8/1). Uncertainty over the likely timing of the Bank of Japan’s (BOJ) next interest rate hike was a key factor undermining the JPY. Further, the Federal Reserve’s (Fed) aggressive policy shift continued to support higher US Treasury bond yields, widening the US-Japan yield differential and weighing on the lower-yielding JPY.
However, speculation that Japanese authorities might intervene in the market to prop up the domestic currency kept JPY market players from placing fresh bets. Additionally, concerns over US President-elect Donald Trump’s tariff plans, geopolitical risks and cautious market sentiment could help limit losses for the safe-haven JPY. This, along with subdued US Dollar (USD) demand, helped cap the USD/JPY pair. Investors also appeared reluctant to wait for US data and the FOMC Minutes.
Source: FXStreet