Japanese Yen remains weak amid aggressive BOJ stance
The Japanese Yen (JPY) maintained its negative bias throughout the Asian session on Monday amid concerns that Japan could also be targeted by US President Donald Trump’s trade tariffs. This, coupled with a modest US Dollar (USD) strength, helped the USD/JPY pair to hold onto its intraday gains near the 152.00 handle. However, a meaningful JPY depreciation remains elusive amid growing bets that the Bank of Japan (BOJ) will raise interest rates again this year.
Additionally, a further rise in Japanese government bond (JGB) yields, leading to a narrowing of the interest rate differential between Japan and the US, could limit losses for the lower-yielding JPY and cap the USD/JPY pair. In the absence of relevant US macro data, it would be wise to wait for a strong follow-through buying before confirming that the currency pair has formed a near-term bottom and positioning for an extension of the intraday positive move.
Source: Bloomberg
