Japanese Yen struggled to find a solid intraday trend and oscillated within a range.
The Japanese Yen (JPY) begins the new week on a downbeat note following a national holiday in Japan, oscillating in a narrow zone just below a new YTD low reached against its American counterpart on Friday.
Dovish words by Bank of Japan Governor Uchida, combined with a favorable risk tone, limited the JPY’s gain.
The bias, meanwhile, The market appears to be biased in favor of negative traders. Following last week’s dovish remarks by Bank of Japan (BoJ) Deputy Governor Shinichi Uchida and a positive risk tone. Which tends to erode the safe-haven JPY. However, rising consensus that the Bank of Japan would eventually alter its ultra-loose monetary policy settings following the outcome of annual salary negotiations in March helps to limit the downside.
Traders have now moved to the sidelines as they await the release of vital US inflation numbers this week.
The US Dollar (USD), on the other hand, is on the defensive due to uncertainties over the Federal Reserve’s (Fed) rate cutting path. Further limiting the USDJPY pair’s upward potential. Traders appear hesitant, preferring to wait for Tuesday’s release of the latest US consumer inflation numbers. The data will be looking for clues about the Fed’s probable timing. And pace of rate decreases, which will increase USD demand and provide a new push to the currency pair. Meanwhile, with no meaningful macro data on Monday, spot prices appear to be more likely to extend the range-bound price action.
Daily Market Movers: The Japanese Yen fluctuates in a range despite mixed fundamental indications.
A combination of diverging pressures fails to provide any major momentum to the Japanese yen on Monday, despite relatively low trade volumes and a Japanese vacation.
Shinichi Uchida, Deputy Governor of the Bank of Japan (BoJ). Stated on Thursday that significant tightening is unlikely even after exiting the negative interest rate policy.
Uchida signaled a gradual shift away from the current negative interest rate environment. And stated that the BoJ does not intend to make any significant changes in the near future.
This, combined with a positive risk tone, undercuts the safe-haven JPY. Albeit firming predictions of an impending shift in the BoJ’s policy stance helps prevent further losses.
The Bank of Japan hopes that significant salary rises by large Japanese corporations this year will support persistent and steady inflation, allowing it to shift away from its ultra-dovish stance.
Federal Reserve members continued to hint that the US central bank is in no rush to decrease borrowing costs in the wake of a still strong economy and sticky inflation.
Dallas Fed Bank President Lorie Logan stated on Friday that there There is no rush to decrease rates, and she needs more evidence on inflation to show that the progress is sustainable.
Atlanta Fed President Raphael Bostic stated that inflation has been too high for too long. That there is still work to be done, and that the United States is on track to resume pre-pandemic economic activity.
The Labor Department’s yearly adjustments, issued on Friday. Showed that US consumer prices rose somewhat more than previously recorded in October and November.
Investors also prefer to remain on the sidelines. Ahead of Tuesday’s release of the latest US consumer inflation numbers. Which may affect the Fed’s future policy decisions.
https://voiceoftraders.com/news/commodities/japans-yen-skips-momentarily-after-kuroda-remarks
