Japanese Yen Weakens Slightly Amid BoJ Uncertainty
The Japanese yen (JPY) maintained its bid tone throughout the first half of the European session on Monday, which, coupled with increased demand for the US dollar (USD), helped the USD/JPY pair hold steady just below the mid-147.00s. Despite the Bank of Japan's (BOJ) hawkish outlook, investors remain uncertain about the likely timing of the next interest rate hike. This, combined with the prevailing risk-on environment, weakens the JPY as a safe haven. The USD, on the other hand, benefited from reduced bets for more aggressive policy easing by the Federal Reserve (FED).
Meanwhile, the growing acceptance that the BOJ will stick to its policy normalization path marks a significant difference compared to other major central banks, including the Fed, which is expected to resume its rate-cutting cycle in September. This, in turn, may discourage USD investors from placing aggressive bets and provide some support for the lower-yielding JPY. Investors may also choose to stay on the sidelines ahead of the release of the FOMC meeting minutes and Fed Chairman Jerome Powell's speech at the Jackson Hole Symposium later this week. (ayu)
Source: Newsmaker.id
