Takaichi Becomes PM, Yen Under Pressure, USD/JPY Hits 149.65!
The USD/JPY currency pair rose sharply to 149.65 in early Asian trading on Monday, after Sanae Takaichi won the election as leader of Japan's ruling party. Takaichi's victory, which would make her Japan's first female prime minister, fueled expectations that the Bank of Japan (BoJ) would likely delay an interest rate hike this month. This boosted the yen and boosted the US dollar.
Takaichi is known to be a staunch opponent of interest rate tightening, making the BoJ's chances of raising interest rates slimmer. Meiji Yasuda Research Institute analyst Kazutaka Maeda believes this could make it difficult for the BoJ to continue raising interest rates, depressing the yen's value in the market.
On the other hand, concerns about a possible US government shutdown also limited the dollar's strength against the yen. The September Nonfarm Payrolls (NFP) report, which was supposed to be released last Friday, was delayed due to the shutdown, adding to investor sentiment.
The market is currently anticipating the possibility of two interest rate cuts by the Federal Reserve by the end of the year, with futures prices reflecting approximately a 47 basis point rate cut. This uncertainty in the US continues to influence USD/JPY movements in the short term. (ads)
Source: Newsmaker.id
