Japanese Yen bulls are uncommitted despite bets anticipating an imminent adjustment in the BoJ’s attitude.

The Japanese yen (JPY) recovers somewhat versus the US dollar during the Asian session on Wednesday, reversing some of the previous day’s losses to the weekly low. The results of Japan’s spring wage discussions show that most businesses have agreed to the trade unions’ wage increase proposals.

The JPY has risen somewhat in response to reports that the BoJ is considering raising interest rates in March.

This follows reports that the Bank of Japan (BoJ) is Consider a March interest rate hike, which turns out to be a crucial element in providing a modest boost to the JPY. Aside from that, a slight US Dollar (USD) decline adds to the offered tone around the USDJPY pair.

Meanwhile, overnight dovish statements by Bank of Japan Governor Kazuo Ueda may have dampened expectations for an early rate hike. This, together with the existing risk-on atmosphere, prevents traders from making big bullish wagers on the safe-haven JPY. Investors appear hesitant and prefer to remain on the sidelines ahead of next week’s significant central bank event risks: the highly anticipated BoJ decision on Tuesday, followed by the outcome of the two-day FOMC policy meeting on Wednesday. This, in turn, necessitates prudence while positioning for The USDJPY exchange rate continues to fall.

Daily Digest Market Movers: Japanese Yen benefits from reviving Bank of Japan rate increase bets amid favorable wage hike news.

Expectations that Japan’s largest corporations will grant significant wage raises and open the path for the Bank of Japan to abandon its zero interest rate policy as early as next week bolster the Japanese yen.
In fact, Rengo, Japan’s largest umbrella body for unions, stated that its connected members had demanded an average salary raise of 5.85% this year, the largest increase in around 31 years.
Toyota, GS Yuasa, Nissan Motor, Nippon Steel, and Hitachi fully agreed to the Union’s wage raise proposal. Okuma Corp increased wages by ¥15,960 compared to the union. Demand: ¥18,215.
Yoshimasa Hayashi, Japan’s Chief Cabinet Secretary, stated on Wednesday that there is tremendous momentum for salary increases and that it is critical that wage increases expand to mid-sized and small businesses.

The USD fades the warmer US CPI-led surge, providing little support to USDJPY.

According to persons familiar with the situation, BoJ officials believe the central bank is on the verge of raising interest rates for the first time since 2007, whether at the March or April policy meeting.
Kazuo Ueda, Governor of the Bank of Japan, stated on Tuesday that the central bank will attempt to exit easy policy if 2% inflation is achieved, dashing hopes for an imminent policy shift next week.
Data provided from the US showed that the headline Consumer Price Index (CPI) climbed 0.4%.In February, the yearly rate was 3.2%, compared to January’s final print and market estimates of 3.1%.
Annual Core CPI, which excludes volatile food and energy costs, rose 3.8% in the reporting month, slightly lower than the 3.9% increase in January but higher than consensus predictions of 3.7%.
The slightly higher US consumer inflation statistics raised US Treasury bond yields, which could act as a tailwind for the US dollar and assist limit any significant depreciation in the USDJPY pair.