Japanese Yen weakens as softer PMI data adds to BoJ rate hike uncertainty
The Japanese Yen (JPY) edges lower during the Asian session after a private survey showed this Wednesday that manufacturing sector activity in Japan fell at the fastest pace in six months in September. The disappointing data comes amid concerns about economic headwinds stemming from US tariffs, which, along with domestic political uncertainty, might give the Bank of Japan (BoJ) more reasons to delay raising interest rates further.
Apart from this, the emergence of some US Dollar (USD) buying assists the USD/JPY pair in gaining some positive traction and snapping a two-day losing streak.
Meanwhile, there were two board members voting against the BoJ's decision last week to keep interest rates unchanged, which underscores mounting pressure within the central bank to phase out its massive monetary stimulus.
In contrast, the US Federal Reserve (Fed) signaled that two more rate cuts will follow through the rest of this year after lowering borrowing costs for the first time since December last week. The latter could act as a headwind for the USD, and the divergent BoJ-Fed policy outlooks could help limit losses for the lower-yielding JPY, warranting some caution for the USD/JPY bulls.
Source: FXstreet.com
