Change of PM, Change of Yen Direction?
The yen hovered around ¥151.7 per dollar on Wednesday (October 22nd), following a volatile spike earlier. The market is still digesting the election of Sanae Takaichi as Japan's new prime minister and the composition of her cabinet—including Satsuki Katayama as finance minister, who is considered more pro-yen strength. Expectations are that the government will boost fiscal stimulus, while the Bank of Japan (BOJ) will remain cautious about raising interest rates too quickly. This combination of "fiscal looseness + monetary prudence" is likely to restrain yen strength in the short term.
According to the latest data, Japanese exports rose 4.2% year-on-year in September and imports rose 3.3%, indicating improving external demand, although the current account remained in a narrow deficit that month. For further direction, the market is awaiting signals from the BOJ—many analysts have pushed back their forecasts for the next interest rate hike to early next year—as well as the initial steps taken by Takaichi's cabinet. If the BOJ remains gradual and fiscally accommodative, the 150-152 level could potentially remain a key area of interest for USD/JPY in the near term. (az)
Source: Newsmaker.id
