Japanese Yen Pares Some Intacraday Losses Amid Hawkish BOJ Expectations
The Japanese Yen (JPY) fell nearly 150 pips intraday against its US counterpart in reaction to comments by Japanese Finance Minister Katsunobu Kato, who said that higher long-term interest rates could weigh on Japan’s fiscal situation. Also, Bank of Japan (BOJ) Governor Kazuo Ueda fueled speculations about a possible intervention to curb rising Japanese government bond (JGB) yields and weaken the JPY.
Meanwhile, strong Japanese National Consumer Price Index (CPI) figures released early Friday reaffirmed expectations that the BOJ will raise interest rates further. This continued to support the rise in JGB yields. Narrowing interest rate differentials between Japan and its peers helped limit losses for the lower-yielding JPY. Additionally, a softer tone surrounding the US Dollar (USD) kept a lid on the USD/JPY pair.
Source: FXStreet