Yen Steady, Markets Prepare for New Fed Chair
The Japanese yen moved steadily around 144.3 per US dollar on Friday (6/28), approaching a two-week high. This stability occurred because the US dollar weakened, along with increasing market expectations that the Federal Reserve will cut interest rates deeper this year. This expectation arose after reports that President Donald Trump is likely to announce a candidate to replace Fed Chair Jerome Powell as early as September or October, which could bring the direction of monetary policy to a looser (dovish) path.
Powell himself in testimony to Congress indicated that monetary easing is still the main option, unless there is a risk of inflation due to rising tariffs. At the same time, the White House also signaled that the deadline for new tariffs is not urgent, easing market concerns about the long-term trade conflict between the US and its trading partners.
Domestically, investors in Japan also digested the latest data showing Tokyo's core inflation slowed in June, although it was still far above the Bank of Japan's (BOJ) target of 2%. This strengthens speculation that the BOJ may raise interest rates further, supporting the yen's strength in the medium term.
Source: (ayu-newsmaker)
