USDJPY rises against the US dollar for the third day in a row.

During the Asian session on Thursday, the Japanese Yen (USDJPY) set a new weekly high. Against the US Dollar (USD) in response to a report that the Bank of Japan (BoJ) may leave its negative rate policy sooner than expected. Between January and March. In contrast, at the end of 2016, the Federal Reserve (Fed) signaled the conclusion of its policy tightening effort. And struck a dovish tone for the next year. On Wednesday, there will be a two-day policy meeting. This resulted in an overnight drop in US Treasury bond yields. Further undermining the buck and dragging the USDJPY pair to the 142.00 area.

However, a continuation of the risk-on rise in global equities markets. With the Dow Jones Industrial Average (DJIA) setting a new record high after January 2022, limits any additional gains for the safe-haven JPY. As a result, the USDJPY pair recovers a few pips from the daily bottom. Any substantial recovery, however, remains difficult due to diverging policy expectations between the BoJ and the Fed. Moving forward, the central bank bonanza could cause some market volatility and affect the JPY ahead of the announcement of Later today, the US Retail Sales figures will be released.

Daily Digest Market Movers: The USDJPY benefits on expectations of a hawkish BoJ turn, while the USD falls as a result of the Fed’s dovish stance.

Expectations of an impending shift in the Bank of Japan’s monetary stance lift the Japanese Yen. Which, along with the post-FOMC US Dollar selling bias. Pushes the USDJPY pair closer to the 142.00 mark during Thursday’s Asian session.

According to Japanese media, the Bank of Japan may be unwilling to go in the opposite way if central banks in the United States and Europe consider rate reduction and decide to depart negative rates between January and March.

At the completion of a two-day meeting, the Federal Reserve maintained the policy rate steady at 5.25%-5.50%.meeting on Wednesday and stated that inflation has slowed, meaning that interest rate hikes have ended.

Earlier in the day, data from the United States indicated that the Producer Price Index (PPI) stayed constant in November, indicating that inflation continues to meander toward the Fed’s average annual 2% objective.

Expectations of a shift in the Bank of Japan’s monetary stance act as a tailwind for the JPY.

The Fed’s latest economic estimates, which featured the so-called “dot plot,” indicated that lower borrowing costs are on the way, with interest rates now expected to fall to 4.6%, implying a cumulative rate decrease of 0.75% next year.

Fed Chair Jerome Powell stated during the post-meeting news conference that the central bank is unlikely to rise further and that it is very intent on not making the mistake of keeping rates unchanged. Rates have been too high for too long.

Following the Fed decision, the yield on the benchmark 10-year US government bond fell to its lowest level since August. While the two-year US Treasury yield, which reflects rate expectations, fell to its lowest level since early July.

Japan Machinery Orders, which are viewed as a leading indicator of capital investment in the next six to nine months. Climbed 0.7% in October, exceeding consensus predictions for a slight fall.

Traders are now looking to the latest monetary policy updates from key European central banks for short-term chances. Ahead of the US monthly Retail Sales, which are forecast to fall by 0.1% in November for the second consecutive month.