Yen Weakens Slightly Against US Dollar, Downside Potential Limited
The Japanese Yen (JPY) exchange rate fell slightly against the US Dollar (USD) following the release of the minutes from the Bank of Japan's (BoJ) July meeting. BoJ policymakers remain concerned about the negative impact of rising US tariffs on the domestic economy, adding to uncertainty about when the BoJ will raise interest rates next.
The positive market sentiment has put selling pressure on the safe-haven Yen. This helped the USD/JPY pair rebound from the support level of 146.70 during the Asian session on Friday morning. However, the market believes the BoJ will raise interest rates before the end of the year.
On the other hand, traders expect a high probability of the Fed cutting interest rates at its September policy meeting. This expectation limited the US Dollar's strength from its two-week low on Thursday and also prevented further weakening of the low-yielding Yen.
Therefore, investors are advised to wait for a strong buy signal before confirming that the USD/JPY pair has reached a short-term bottom. (ayu)
Source: Newsmaker.id
