Japanese Yen rebounds from multi-month low against USD ahead of BoJ decision
The Japanese Yen (JPY) edges higher against a softer US Dollar (USD) during the Asian session on Thursday and recovers a part of the previous day's slide to its lowest level since early April. Data released from Japan earlier today showed that Industrial Production unexpectedly grew in June, while strong Retail Sales pointed to resilience in consumer spending.
This, along with some repositioning trade ahead of the crucial Bank of Japan (BoJ) policy update, offers some support to the JPY. Investors will look for signals on how the recent US-Japan trade agreement might influence the BoJ's intention to raise interest rates before the end of this year.
That said, the recent economic data from Japan indicated signs of cooling inflation. Adding to this, rising domestic political uncertainty could complicate the BoJ's policy normalization path.
Hence, the focus will be on the post-meeting press conference, where comments from BoJ Governor Kazuo Ueda will influence the JPY.
The USD, on the other hand, might continue to draw support from the Federal Reserve's (Fed) hawkish tone, which tempered hopes for a rate cut in September. This might contribute to limiting losses for the USD/JPY pair, warranting caution for bearish traders heading into the central bank event and ahead of the US inflation data.
Source: FXstreet
