USDJPY rises as the BoJ maintains its bond-buying levels from the prior operation.
USDJPY surged to around 155.90 during the Asian session on Friday, as the Japanese Yen (JPY) came under further pressure. This was spurred by the Bank of Japan’s (BoJ) decision to retain its bond-buying levels from the previous operation, rather than reducing debt purchases unexpectedly earlier this week.
Former BOJ senior economist Toshitaka Sekine stated that the central bank could raise interest rates three times in 2024.
Traders predict that the Bank of Japan may limit bond purchases at its June policy meeting. BOJ Governor Kazuo Ueda also stated that there are no urgent intentions to divest the central bank’s ETF holdings.
In an interview with Bloomberg, former BOJ chief economist Toshitaka Sekine said that the Bank of Japan could raise its benchmark interest rate three more times this year. Sekine suggested that the next step may take place as early as June, given the enormous room available to change its present “excessively” easy settings.
The US dollar gains as the Fed maintains a cautious posture on the probability of interest rate cuts this year.
The US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against six major currencies, is trading at 104.60 after recovering from a multi-week low of 104.08 set on Thursday. The Federal Reserve (Fed) remains cautious on inflation and the possibility of rate reduction in 2024.
Reuters reports on Thursday Atlanta Fed President Raphael Bostic said Thursday at an event in Jacksonville that there is a need for patience with interest rates, stressing that significant pricing pressure remains in the US economy. Furthermore, Cleveland Fed President Loretta Mester stated that it may take longer than expected to clearly determine the inflation trajectory, implying that the Fed should retain its restrictive posture for an extended period.
