Japanese yen is struggling to benefit from the overnight small increase against the US dollar.

During the Asian session on Wednesday, the Japanese Yen (JPY) Fluctuated between modest gains and minor losses against its American Counterpart, remaining limited to a typical range held for the past two weeks or so. The likelihood of Japanese government Intervention to avert a Disruptive decline in the native currency, along with a generally negative Sentiment in the equities markets, gives some support to the safe haven JPY.

The BoJ’s dovish attitude weakens the yen, although intervention fears restrict the downside.

Nonetheless, The Bank of Japan’s (BoJ) dovish tone, indicating that the next rate hike will be some time away, fails to help the JPY attract any meaningful buyers.

The US Dollar (USD), on the other hand, continues under selling pressure for the second consecutive day, contributing to the USDJPY pair’s sluggish price movement.

Reduced expectations for a June Fed rate drop should help the US dollar and the USDJPY.

Meanwhile, the markets have reduced their expectations that the Federal Reserve (Fed) will lower interest rates in June. This maintains US Treasury bond yields elevated, benefiting USD bulls. This, combined with views that the difference between US and Japanese interest rates will remain broad, means that the path of least resistance for the currency pair is to the upside, supporting possibilities for an eventual breakout through a Short-term range.

Daily Market Movers: Japanese Yen continues to be damaged by the BOJ’s cautious attitude.

Japanese Finance Minister Shunichi Suzuki reiterated that authorities were prepared to take appropriate steps in response to excessive exchange-rate volatility, while also offering some support for the Japanese yen.
The ambiguity surrounding the Federal Reserve’s plans to lower interest rates, combined with persisting geopolitical worries, dampens investors’ desire for riskier assets and strengthens the JPY’s relative safe-haven reputation.
At the close of the March meeting, the Bank of Japan struck a dovish tone and declined to provide any direction on future policy actions or the speed of policy normalization, capping JPY gains.
Following the release of data, the odds of a June Fed rate drop fell below 50%.This week’s data showed that the US manufacturing sector expanded in March for the first time since September 2022, and that labor demand remains high.
The US Bureau of Labor Statistics (BLS) announced in the Job opportunities and Labor Turnover Survey (JOLTS) on Tuesday that there were 8.75 million job opportunities on the final business day of February.
According to a second data from the Commerce Department’s Census Bureau, new orders for US-manufactured goods rose more than expected in February, rising 1.4% after falling 3.8% the month before.

San Francisco Fed President Mary Daly stated on Tuesday that inflation is steadily reducing.

San Francisco Fed Presidein Mary Daly stated on Tuesday that inflation is steadily reducing, albeit in an unpredictable and slow manner, and that maintaining the status quo is the appropriate approach at present.

Furthermore, Cleveland Fed President Loretta Mester anticipates the central bank to decrease interest rates later this year, but warns that doing so too soon risks erasing inflationary momentum.
This follows Fed Chair Jerome Powell’s statements on Friday, in which he stated that there was no need to rush to decrease interest rates and questioned whether the central bank would drop rates three times this year.
The yield on the benchmark 10-year US government bond surged to a four-month high, allowing the US dollar to stall the overnight drop from a multi-month peak and serving as a tailwind for the USDJPY pair.