Japanese yen rises versus the dollar, but stays close to a two-month low.
On Tuesday, the Japanese Yen (JPY) remained on top against the US dollar, despite a lack of follow-through purchasing and a close to the lowest level since early August seen the day before. Any real upside for the JPY, however, remains elusive in the face of uncertainty surrounding the Bank of Japan’s (BoJ) rate-hike prospects. This, together with A broadly favorable risk tone should keep pressure on the safe-haven JPY.
Bets on fewer interest rate decreases by the Fed support the USD and boost USDJPY bulls.
Meanwhile, expectations of less aggressive policy easing from the Federal Reserve (Fed) and increased betting on a regular 25 basis point (bps) rate decrease in November keep US Treasury bond yields elevated. This helps the US Dollar (USD) maintain its two-month high while also limiting the gain for the lower-yielding Japanese yen. As a result, any following decline in the USDJPY pair may still be viewed as a buying opportunity with limited downside.
Daily Market Movers: Japanese Yen struggles to attract any major buyers amid BoJ rate uncertainty and risk-on mentality.
Japanese Prime Minister Shigeru Ishiba’s recent statements successfully pushed back market expectations for any future interest rate increases. By the Bank of Japan (BoJ) in the near future.
On Monday, US market indices continued to rise, with the S&P 500 and Dow Jones Industrial Average setting fresh highs on expectations of strong results.
The US dollar extended its recent gains over the last two weeks or so, reaching its highest level since August 8 amid bets of lesser interest rate decreases by the Federal Reserve.
Minneapolis Fed President Neel Kashkari said on Monday that recent job data suggests. That the labor market is not worsening, and that policy will be guide by statistics and the economy’s performance.
Fed Governor Christopher Waller stated that the US central bank should continue with more prudence regarding interest rate decreases.
Separately, Fed Governor Christopher Waller stated that the US central bank should continue with more prudence regarding interest rate decreases. More than was required in the September policy meeting.
According to the CME Group’s FedWatch Tool, traders expect a usual 25 basis point rate drop in November, with over a 15% possibility of no cut.
A recent surge in 10-year US government bond yields to levels above the 4% mark supports USD bulls and should contain the low-yielding Japanese yen.
Traders now expect the Empire State Manufacturing Index to provide some impetus later in the North American afternoon, ahead of remarks by prominent FOMC members.
