Japanese Yen relinquishes some of its recent big gains against the US Dollar.
The Japanese Yen (JPY) depreciates for the second day in a row. Lifting the USDJPY pair to the mid-145.00s ahead of the European session on Monday. According to a Friday report, Bank of Japan (BoJ) Governor Kazuo Ueda’s words last week were taken out of context. And were not intended to signify anything. about the timing of a policy change. Furthermore, the weaker GDP figure highlighted Japan’s still fragile economy. And hinted that market expectations of an imminent rate hike may be exaggerated. This is perceived as eroding the JPY.
Reduced wagers on an impending adjustment in the Bank of Japan’s policy undercut the JPY.
The USD, on the other hand, is being supported by a higher monthly jobs report released on Friday. Which has prompted traders to speculate that the Federal Reserve (Fed) may not begin a series of interest rate decreases until May 2024. This contributes to the USDJPY pair’s ongoing rebound move from a multi-month low reached last Thursday. Concerns about a worse global economic slowdown. As well as geopolitical dangers, may limit losses for the safe-haven JPY and prevent any further decline. Ahead of this week’s big data/event threats for the major.
The US consumer inflation data are scheduled to be released on Tuesday. Followed by the outcome of the two day FOMC monetary policy meeting on Thursday. The so called “dot plot” will reveal clues about the Fed’s interest rate estimates for the coming year. Which should have a significant impact on the near term USD pricing dynamics and provide some serious push to the major. As a result, it is important to wait for substantial follow through buying before concluding that spot prices have bottomed out and preparing for further gains.
Daily Market Movers: The Japanese Yen relinquishes some of its recent big gains against the US Dollar.
According to Reuters, three According to sources acquainted with the subject, Bank of Japan Governor Kazuo Ueda’s statements last week were not intended to suggest an impending policy shift.
This, together with data indicating that Japan’s GDP declined more steeply than initially expected in the third quarter, by an annualized 2.9%, is viewed damaging the Japanese Yen.
According to the US Bureau of Labor Statistics (BLS). The economy added 199K new jobs in November, up from 150K the previous month and 180K expected.
According to the publication’s additional details, the unemployment rate fell to 3.7% from 3.9% in October. Despite an increase in the labor force participation rate to 62.8% from 62.7%.
Annual pay inflation, as indicated by changes in the Average Hourly pay Earnings met consensus projections. And was stable at 4% in the reported month.
The positive US employment data have caused investors to lower their expectations for the Federal Reserve to decrease interest rates as soon as March 2024.
Investors are now anticipating the release of the latest US consumer inflation numbers on Tuesday. Which may impact market expectations for a series of Fed rate cuts next year.
Meanwhile, the market will be focused on the so-called “dot plots”. And Fed Chair Jerome Powell’s remarks at the post meeting news conference.
