Japanese yen remains weak in the face of uncertain policy outlook from BoJ.

During the Asian session on Monday, the Japanese yen (JPY) remained close to a multi-decade low against the US dollar. Uncertainty about the Bank of Japan’s (BoJ) additional policy tightening. And lessening geopolitical tensions in the Middle East proved to be major reasons. Undermining the safe-haven JPY. However, BoJ Governor Kazuo Ueda’s hawkish comments last week. As well as fresh cautions from Japanese Finance Minister Shunichi Suzuki against excessive currency market movements, helped limit further JPY losses.

Traders appear cautious ahead of this week’s important central bank event and data risks

Traders appear hesitant and prefer to remain on the sidelines ahead of the critical BoJ policy announcement on Friday. Aside from that, important US macro releases – the Advance Q1 GDP on Thursday and the Personal Consumption Expenditures (PCE) Price Index on Friday – will be critical in defining the next leg of a directional move for the Japanese yen pair. Meanwhile, predictions that the Federal Reserve (Fed) would not begin its rate-cutting cycle until September should act as a tailwind. For the US Dollar (USD) and loans some support to the Japanese yen pair.

Daily Market Movers: Japanese Yen bears not ready to give up despite intervention warnings.

Data released on Friday revealed that Japanese consumer inflation fell more than expected in March. Raising questions about whether the Bank of Japan will hike interest rates again and dragging on the Japanese yen.
Iran indicated that it has no plans to retaliate following Israel’s limited-scale missile assault on Friday. Which increases investors’ desire for riskier assets and undermines the JPY’s relative safe-haven position.
On Friday, BoJ Governor Kazuo Ueda stated that the central bank may consider hiking interest rates again if the Yen falls significantly. Boosting inflation and adding support to the domestic currency.

Japan’s Finance Minister, Shunichi Suzuki, issued further warnings to speculators about pushing the JPY too low.

Japan’s Finance Minister, Shunichi Suzuki, issued further warnings to speculators about pushing the JPY too low. And repeated that he will take appropriate action in the event of excessive currency market movements.
According to Fed funds futures. The Federal Reserve is currently expected to decrease interest rates by approximately 40 basis points (bps), or less than two cuts this year, beginning in September. In response to persistent US inflation.

This implies that the significant rate disparity between the US and Japan will persist. Acting as a headwind for the JPY and providing support for the USDJPY pair ahead of the critical BoJ monetary policy decision.
Markets anticipate no policy changes following last month’s historic decision to stop the negative rate policy and Yield Curve Control (YCC) program, implying that the focus will stay in the quarterly outlook report.
The US Advance Q1 GDP print and the Personal Consumption Expenditures (PCE) Price Index are scheduled for release on Thursday and Friday, respectively, and are expected to influence US Dollar price dynamics.